INTERNATIONAL COURT OF ARBITRATION & SECRETARIATyac.dk/wp-content/uploads/2017/06/YAC-Copenhagen... · 6/20/2017 · ICC INTERNATIONAL COURT OF ARBITRATION ® ICC INTERNATIONAL CENTRE

INTERNATIONAL COURT OF ARBITRATION & SECRETARIATYAC Copenhagen 20 June 2017

Friederike SchaeferCounselICC International Court of Arbitration

ICC INTERNATIONAL COURT OF ARBITRATION ®

ICC INTERNATIONAL CENTRE FOR ADR

ICC DISPUTE RESOLUTION SERVICES

May 2016ICC Arbitration 1

ICC International Centre for ADR

ICC International Courtof Arbitration


• ICC founded in 1919 (« the merchants of peace »)

• ICC ICA founded in 1923

• “a recognition that the lack of an international dispute-resolving mechanism could be a substantial barrier to international trade and investment”

W. Laurence Craig, International ambition and national restraints in ICC Arbitration, Arbitration International, Vol. 1/ n°1, 1985

• Rules of Arbitration, different versions since 1922

1998 Rules → 35 articles and 3 appendixes (1st case number: 9 827)

2012 Rules → 41 articles and 5 appendixes (1st case number: 18 744)

Today > 22 000 cases.

HISTORY

1 booklet:

- 2012 Arbitration Rules- 2014 Mediation Rules



ICC REPUTATION

May 2016ICC Arbitration 3

2015 International Arbitration Survey: Improvements &Innovations in International Arbitration

• 90% international arbitration as preferred dispute resolution mechanism

• 68% chose ICC as preferred institution

• Most valuable characteristic :– Enforceability of awards – Avoiding specific legal systems– Flexibility– Selection of arbitrators

www.arbitration.qmul.ac.uk/research/2015/



4

22 000+• Cases administered

966• New cases filed

1592• Pending cases

497• Awards issued

1411• Arbitrators confirmed or appointed

GENERAL STATISTICS (2016)



5

11%• Cases involve States or State entities

106• Cities as place of arbitration

(in 60 countries)

3099• Parties coming from 137 countries

25• Emergency Arbitrator Applications

(56 up to date)

GENERAL STATISTICS (2016)



GENERAL STATISTICS: NUMBER OF CASES

0

200

400

600

800

1000

1200New Cases Number of

new cases filed in 2016 966Including 25 applications for Emergency Measures

1 592 pending cases

11% of cases involving states or state entities



HISTORY OF A CASE

(Emergency Arbitrator)

(Emergency Arbitrator)

Request• Art. 5(2)• 5 000 $ (registration fee)

Request• Art. 5(2)• 5 000 $ (registration fee)

Answer• Joinder warning• Answer to

counterclaims

Answer• Joinder warning• Answer to

counterclaims

Arbitral Tribunal• 1 or 3 arbs?• Nomination by

the parties?• Transmission of

file

Arbitral Tribunal• 1 or 3 arbs?• Nomination by

the parties?• Transmission of

file

Terms of reference• CMC• Procedural

timetable

Terms of reference• CMC• Procedural

timetable

Hearings, ClosingHearings, Closing

Award(Partial, Award,

by Consent)

Award(Partial, Award,

by Consent)

1 month

30 days

Provisionaladvance AAdvance

on costs



ECONOMICS SECTORS 2016

19.8%19.4%

12.8%

6.3% 5.4% 5.3%3.9% 3.7% 3.2% 2.9% 2.7% 2.4% 2.4% 2.0% 1.2% 1.2%1.2%



AMOUNT IN DISPUTE IN PENDING CASES (JANUARY 2017)

Amount in dispute < US$ 1 million in 33 % of cases

93

87

118

83

346

169

262

112

134

155

58

0 50 100 150 200 250 300 350 400

Not quantified

< US$ 100.000

US$ 100.000‐500.000

US$ 500.000‐1.000.000

US$ 1‐5 Million

US$ 5‐10 Million

US$ 10‐30 Million

US$ 30‐50 Million

US$ 50‐100 Million

US$ 100‐500 Million

> US$ 500 Million

Average amount in pending cases: US$ 112 259 575



PLACES OF ARBITRATION 2016

14% 13%12%

10%

6%

4% 4% 3%2% 2%

• Place of arbitration fixed by the Court in 15% of cases

• Ranking for 10 first countriesPlace of arbitration in 2006

52 countries

89 cities

Place of arbitration in 2016

60 countries

106 cities



24%

7%3%4%

19%26%

6%11% 1%

2016 North & WestEurope

Central & EasternEurope

North Africa

Sub-Saharan Africa

North America

Latin America &Caribbean

Central & West Asia

South & East Asia

Oceania

DIVERSITY OF ICC ARBITRATION: PARTIES

Number of parties in 2006

1613 parties

125 countries

Number of parties in 2016

3099 parties

137 countries

11

34% of cases with more than two parties

25% of cases with parties of same nationality



THE INTERNATIONAL COURT OF ARBITRATION

ICC INTERNATIONAL COURT OF ARBITRATIONICC INTERNATIONAL CENTRE FOR ADR

International Court of Arbitration (HQ in Paris)

Arbitral Tribunal(any place in the world)

- Does not settle itself disputes- Supervises the work of the Arbitral

Tribunals and administers the proceedings

- Constitution of the Arbitral Tribunal- Control of time limits under the Rules- Award scrutiny- Fixes arbitrator’s fees and

administrative expenses

- Decision on the merits of the case- Management of the case in

consultation with the parties- Principles of rapid, diligent and

contradictory process- Draft the terms of reference, renders

procedural orders and awards- Decides on the allocation of costs

among the parties



THE INTERNATIONAL COURT OF ARBITRATION


Founded in 1923

To date: 22.000 cases

The Court sessions are in French and English but can sometimes be in Spanish or German

Members of the Court are appointed for renewable 3 year term by the World Council of the ICC

Composition One President: Alexis Mourre

15 Vice-Presidents

145 Members from 84 countries and territories

Sessions Committee sessions Weekly

3 Court members

All type of decisions

Plenary sessions Monthly

Open to all Court members

Challenges, majority awards, States

THE ICC SECRETARIAT

Composition Approx. 80 staff members

Diverse nationalities & languages

One counsel, several deputy counsel per team

Mission Daily case administration

Contact with parties, arbitrators

Advice on practices, briefings and recommendations to the Court

Communication with parties and arbitral tribunals

General info on application of the Rules

Secretary General Deputy Secretary General

Managing Counsel

‘French’ LatAm Commonwealth NorthAm

(in NY)‘Swiss’ EasternEur EasternMed ‘German’ Asian

(in HK)

Int’l Centre for ADR& Expertise

Commission on Arbitration

& ADR

Documentation& research centre

Publications

Trainings & conferences


ICC INTERNATIONAL CENTRE FOR ADRICC Institute Training on Int'l Contracts level I Paris, 1 June 2016 [AGF]


1. Control over the arbitrators- constitution of AT (confirmation, nomination SG, Court)- challenge, replacement

2. Control over the procedure- jurisdiction: Art. 6 (3)-(4)- complexe proceedings: Art. 7-10- control of time limits and extensions (TOR, award, modified time limits Art. 38)

3. Control over the costs- fixing of advance on costs (arbitrators’ fees, expenses, administrative fee)- reajustment of the advance on costs (change in the amount in dispute, withdrawal of claims, increased complexity of the case, time spent & efficiency of the arbitrator)

- separate advance on costs

4. Control over the award- scrutiny of award- approval or non-approval- Addendum/ Decision

MAIN ASPECTS OF ICC ARBITRATION


Prima facie jurisdiction over parties and/or claims (art. 6(4) i) ii))

Consolidation of cases (art. 10)

Place of arbitration (art. 18)

Number of arbitrators/ confirmation/ challenge/ replacement (art. 12-15)

Advances on costs/ separate aoc/ arbitrators’ fees (art. 37 & Appendix III)

Approval TOR if lack of signature or lack of participation of one party (art. 23(3)

Scrutiny of award (art. 34)

ICA ADMINISTERS ARBITRATIONS UNDER THE RULES


Arbitrator selection


• Constitution of the arbitral tribunal is subject to partyautonomy in most arbitration laws and institutional rules

• Such possibility, in particular, the parties’ right to select“their” arbitrators is perceived as one of the most importantfeatures of arbitration

• Limits of party autonomy regarding arbitrator selection– Independence and Impartiality of the arbitrators– Equality of the parties’ rights in the selection process

has to be observed (“Dutco”) (eg Article 12(8) of the ICCRules)

LEGAL FRAMEWORK

INTERNATIONAL COURT OF ARBITRATION®

• The disputes shall be decided by a sole arbitrator or by three arbitrators. (Article 12(1))

Number of Arbitrators

• Where the parties have not agreed upon the number ofarbitrators, the Court shall appoint a sole arbitrator, save whereit appears to the Court that the dispute is such as to warrant theappointment of three arbitrators.

• In such case, the claimant shall nominate an arbitrator within aperiod of 15 days from the receipt of the notification of thedecision of the Court, and the respondent shall nominate anarbitrator within a period of 15 days from the receipt of thenotification of the nomination made by the claimant. If a partyfails to nominate an arbitrator, the appointment shall be made bythe Court. (Article 12(2))

Default

NUMBER OF ARBITRATORS UNDER THE ICC RULES

19


• Determining the number of the arbitrators

• Determining the method of determining the number of arbitrators– Number of arbitrators depending on amount in disputes

• Determining the method of selection of arbitrators– Who may nominate– List procedure – who compiles the list

• Determining certain requirements / characteristics the members of thearbitral tribunal must fulfil (or must not fulfil)

• Nationality• Qualification

• Identifying individuals

• After commencement reduced options depending on agreement with theother party/parties

OPTIONS WHEN DRAFTING THE ARBITRATION AGREEMENT


• Numbers of arbitrators:– Speed / Efficiency of the conduct of the proceedings: 1– Costs: 1– Minimizing risks of procedural or substantive errors: 3

• Individual choices:– Style of conduct of proceedings

• “Civil law style” v “Common law” style• Indication of legal assessment of arbitral tribunal in settlement

discussions / decisions on taking of evidence• Reluctance / Tendency to rely on certain procedural instruments, e.g.

cross examination, document production• Individual expectations

• E.g. chess clock– Legal assessment of the case

• Certain traditions of contract interpretation / assessment of damages /standard of evidence / legal minded v economically minded

RELEVANCE OF ARBITRATOR SELECTION FOR PROCEDURE



RELEVANCE SELECTION OF ARBITRATORS IN PRACTICE

2016 ICC arbitral tribunals

< 30% appointments by the Court

• Nominations by parties and confirmed by Secretary General or Court 56%

• Appointments by Court upon proposal from ICC National Committee or Group 16%

• Nominations by co-arbitrators (for presidents)15%

• Appointments by Court directly 12%

• Appointments by an authority other than the Court 0.3%

3 Member Tribunal

55%

Sole Arbitrator

45%


• The Court shall make the appointment upon proposal of the NationalCommittee, Article 13(3) of the ICC Rules– Appointment of arbitrator’s who submit a qualified statement of acceptance?– Appointment of arbitrator who have limited availability?

• Direct Appointment, Article 13(3), (4) of the ICC Rules:– If NC does not make a proposal in time / no NC existent– Participation of state or state entity– Other circumstances make a direct appointment necessary

• Restrictions as to nationality, Article 13(5) of the Rules• General criteria:

– Qualification, experience/expertise in relevant area– Arbitration experience– Diversification (avoiding repeat appointments, enlarging the pool)

SELECTION OF INDIVIDUALS BY INSTITUTION



DIVERSITY OF ICC ARBITRATION: ARBITRATORS

51%

6%

1%1%

16%

12%

4% 5% 3%

2016North & West Europe

Central & East Europe

North Africa

Sub-Saharan Africa

North America

Latin America &CaribbeanCentral & West Asia

South & East Asia

Oceania

2006 949 arbitrators

71 countries

2016 1411 arbitrators

76 countries


Scrutiny of Awards



SCRUTINY OF AWARD (ART. 34)

Before signing anyaward, the arbitraltribunal shall submit itin draft form to theCourt.

The Court may lay downmodifications as to theform of the award and,without affecting thearbitral tribunal’s liberty ofdecision, may also drawits attention to points ofsubstance.

No award shall berendered by the arbitraltribunal until it has beenapproved by the Courtas to its form.

• Art. 32(2): The award shall state the reasons upon which it is based

• App. II, Art. 6: When the Court scrutinizes draft awards, it considers, to the extentpracticable, the requirements of mandatory law at the place of thearbitration.

• Art. 42: In all matters not expressly provided for the Rules, the Court andthe AT shall act in the spirit of the rules and make sure that awardis enforceable at law.



GENERAL STATISTICS: AWARDS

293

415

508

491471

459

498479

0

100

200

300

400

500

600

2006 2009 2011 2012 2013 2014 2015 2016

Number of Awards ApprovedNumber of Awards Approved in 2016 479



• Awards: - 479 awards approved: - 99,4 % of the approved awards were approved with comments (“subject to modification”)- 43 awards not approved (9% of awards)

2016 AWARDS

64%

29%

7%

Final AwardsPartial AwardsAwards by Consent



SCRUTINY OF AWARD (ART. 33)


Draft of the award sent to the Secretariat by

the Tribunal

1st level of review(the Counsel)

2nd level of review(SG, DSG, GC, MC)

3rd level of review(the Court)

Not approved (sent back to AT) Approved Approved but subject

to comments (Art. 33)

The Tribunal takes into account the comments of

the Court

The award is signed by the Court and sent to the

Secretariat

The Secretariat notifies the award to the parties

(Art. 34)

New draft of the award based on the Court’s

comments



SCRUTINY OF AWARDS - EXAMPLEClaimant’s request:

Claimants request the Tribunal to grant the following relief:

a) Respondent shall pay to XY the amount of EUR 14,780,000, in eventu, to pay this amount to Claimants, plus, in any event, interest at an annual rate of 8% above the Austrian base rate (Basiszinssatz), which, for the time being, is minus 0.12%, from 26 April 2013 until full payment is made;

b) Respondent shall pay to YZ the amount of EUR 4,179,000, in eventu, to pay this amount to Claimants, plus, in any event, interest at an annual rate of 8% above the Austrian base rate (Basiszinssatz), which, for the time being, is minus 0.12%, from 26 April 2013 until full payment is made;

c) Respondent shall pay to YZ Hungary the amount of EUR 623,000, in eventu, to pay this amount to Claimants, plus, in any event, interest at an annual rate of 8% above the Austrian base rate (Basiszinssatz), which, for the time being, is minus 0.12%, from 26 April 2013 until full payment is made;

d) Respondent shall compensate Claimants for their costs and expenses in the arbitration on a full indemnity basis in an amount to be specified later together with interest; and

e) Respondent, as between the Parties, shall bear the entire compensation due to the Arbitral Tribunal and to the ICC and shall compensate Claimants for any amounts that Claimants have paid or will pay to the ICC in relation to the arbitration including, but not limited to Claimants' part of the advance on costs.

Respondent’s request:

Respondent requests the Tribunal to:

a) dismiss Claimants’ claims in their entirety; and

b) order Claimants to pay Respondent all of its costs of these arbitral proceedings amounting to EUR 4,466,689.97.



SCRUTINY OF AWARDS - EXAMPLE• For these reasons, the Tribunal renders the following

Final Award:• Claimants’ claims are dismissed in their entirety.

• Claimants are to bear the Arbitration Costs fixed by the Court in the amount of EUR 670,000.00, of which EUR 335,000.00 have already been advanced by Claimants. The Tribunal orders Claimants to pay to Respondent EUR 335,000.00 in Arbitration Costs within two weeks from receipt of this Final Award.

• Claimants are to bear the Expert Costs in the amount of EUR 183,357.60, of which EUR 91,678.80 have already been advanced by Claimants. The Tribunal orders Claimants to pay to Respondent EUR 91,678.80 in Expert Costs within two weeks from receipt of this Final Award.

• Claimants are to bear their own Party Costs. The Tribunal orders Claimants to pay to Respondent EUR 2,610,049.18 in Party Costs within two weeks from receipt of this Final Award.

• All other and further prayers for relief and motions the Parties have put forward in this arbitration are dismissed.



TIMING OF THE AWARD

Overlong procedures may render legal protection ineffective

ICC aims at enhancing efficiency in the submission of draft Awards to the Court

• Note to parties & ARBITRAL TRIBUNALS

[…]

86. In this regard, sole arbitrators are expected to submit draft awards within two months and three-member arbitral tribunals within three months after the last substantive hearing on matters to be decided in the award or the filing of the last written submissions concerning such matters (excluding cost submissions), whichever is later (Article 27).


THANK YOUFOR YOUR ATTENTION!

Friederike SchäferCounsel

ICC International Court of Arbitration33-43, Avenue du President Wilson75116 ParisFrance

[email protected]

Documents

INTERNATIONAL COURT OF ARBITRATION & SECRETARIATyac.dk/wp-content/uploads/2017/06/YAC-Copenhagen... · 6/20/2017 · ICC INTERNATIONAL COURT OF ARBITRATION ® ICC INTERNATIONAL CENTRE