1. Article 7 (5) draft ICC Rules 2021 (Joinder of additional parties)

Under the current ICC Rules, a party is only able to join another party in arbitration proceeding beforethe confirmation or appointment of any arbitrator unless all parties, including the additional party, agree otherwise.

The draft ICC Rules 2021 add a new paragraph to the existing Article 7 which also allows requests for joinder to be made to the arbitral tribunal after the confirmation or appointment of any arbitrator. Any such request will be decided by the arbitral tribunal once constituted and shall be subject to the additional party accepting the constitution of the arbitral tribunal and agreeing to the terms of reference (if any). In its decision, the arbitral tribunal must take into account all relevant circumstances, which may include inter alia whether the arbitral tribunal has prima facie jurisdiction over the additional party, the timing of the request for joinder, possible conflicts of interests and the impact of the joinder on the arbitral procedure. As this list is not exhaustive, the arbitral tribunal can examine other circumstances in its own discretion depending on the situation at hand. Any decision to join an additional party is without prejudice to the arbitral tribunal’s decision on its jurisdiction with respect to that party.

In sum, under the draft ICC Rules 2021, requests for joinder can be made after the constitution of the arbitral tribunal and the consent of the other arbitration parties is no longer needed.

2. Article 10 (b) draft ICC Rules 2021 (Consolidation of arbitrations)

The draft ICC Rules 2021 Rules slightly amend Article 10 (b) of the current ICC Rules. Contrary to the current rules, under the new rules, it will be possible to consolidate claims made in an arbitration even if they rely on more than one arbitration agreement.

3. Article 11 (7) draft ICC Rules 2021 (Disclosure of third-party funding)

The draft ICC Rules 2021 inserted a new paragraph in Article 11 obliging the parties to promptly inform the secretariat, the arbitral tribunal and the other parties of the existence and identity of any non-party which has entered into an arrangement for the funding of claims or defences and under which it has an economic interest in the outcome of the arbitration. The main purpose of this provision is to increase transparency and to assist prospective arbitrators and arbitrators in complying with their duties of impartiality and independence. A similar disclosure obligation already exists under General Standard 7 of the IBA Rules on Conflict of Interest in International Arbitration.

The ICC already knew a similar provision which, however, was only of guiding nature (cf. ICC Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration, paragraph 28). While Article 11 (7) draft ICC Rules 2021 obliges the parties to disclose certain third-party funding arrangements, it remains silent on the consequences of a breach of this obligation. Furthermore, as the obligation placed upon the parties thereunder is only intended to safeguard the impartiality and independence of arbitrators, it does not oblige the parties to disclose a third-party funding arrangement if such arrangement has no impact on the duties of impartiality and independence of the arbitrators. The future will show whether this new provision will be only a "paper tiger" or an effective tool to strengthen the impartiality and independence of arbitrators.     

4. Article 26 (1) draft ICC Rules 2021 (Hearings)

Contrary to Swiss state courts, which de lege lata have no such option, ICC arbitral tribunals already had the power to conduct virtual hearings during the current COVID-19 pandemic (cf. ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic, paragraph 23). Pursuant to the new Article 26 (1) draft ICC Rules 2021, arbitral tribunals may decide, after consulting with the parties, and taking into account the relevant facts and circumstances of the case, whether hearings shall be conducted by physical attendance or remotely by videoconference, telephone or other appropriate means of communication. Thus, it is within the sole discretion of the arbitral tribunal to order a virtual hearing, either on its own motion or upon a party’s request. However, as the arbitral tribunal is obliged to consult with the parties before making its decision, it is very likely that arbitral tribunals will not deviate from the common opinion of the parties. Although it might have been more user-friendly and certainly appreciated by the parties to expressly state that their joint request would be binding on the arbitral tribunal, such rule might have jeopardized the efficiency of arbitral proceedings if a party (in practice presumably mostly defendants) insists on a physical hearing (in particular for “guerilla tactics” reasons) although such a hearing is not possible for various reasons, such as pandemics. Given the cost and time savings that go along with a virtual hearing, in our view, the new draft rule on virtual hearings seems acceptable.    

5. Article 12 (9) draft ICC Rules 2021 (Constitution of the arbitral tribunal)

Probably the most controversial provision of the draft ICC Rules 2021 is Article 12 (9). This provision empowers the ICC Court to appoint in exceptional circumstances all member of the arbitral tribunal to avoid a significant risk of unequal treatment and unfairness which might affect the validity of the award. While it is clear from the wording of the provision that this rule shall only apply in exceptional cases, it remains totally unclear what qualifies as “exceptional circumstances” under this provision. Furthermore, even if “exceptional circumstances” are established, the ICC Court is not obliged to apply Article 12 (9) as it is only a discretionary provision. In our view, the ambiguities of this provision impact the predictability of the arbitration process and may even result in parties turning away from the ICC Rules 2021. More guidance, e.g. in form of examples enumerated in this provision, would have been helpful. In this context, it should be remembered that the right of the parties to appoint “their” arbitrator in multi-arbitrator proceedings is a fundamental right of arbitration stakeholders and a key reason to arbitrate. Finally, there is a risk that the losing party will seek annulment of the arbitral award on the grounds that the composition of the arbitral tribunal was not made in accordance with the arbitration agreement (see, e.g., art. 190[2]a of the Swiss Statue on International Private Law [SPILA] or art. V[1]d of the New York Convention 1958 [NYC]).

Conclusion

In conclusion, the draft ICC Rules 2021 as a rule do not contain substantial changes. Most changes are relatively minor and reflect current practice. While most of them certainly will contribute to improve the standing of the ICC as one of the world’s leading arbitration institutions, there remain certain concerns regarding the new Article 12 (9) which allows the ICC Court under “exceptional circumstances” to nominate all arbitrators. It remains to be seen whether this provision will affect the attractiveness of the ICC Rules 2021.