I know that I have written much about the advantages of resolving an international dispute through international arbitration. However, this view might be a little bit biased, given that I tend to practice international arbitration, so the temptation is to promote something as awesome, specially if you do that for a living.
However, international arbitration is not a walk in the park, and may have some disadvantages that are quite hard to overcome, one of those issues is the possible financial burdens parties will endure, especially in cases when one of the parties is reticent to participate into the arbitration proceedings, some times, you just need big pockets, and you might not have enough liquidity to finance the whole dispute through international arbitration, it is not free, and also, when hiring your lawyers, they will charge.
I know that there are quite a bit of statistics that point towards the fact that the majority of the costs of international arbitration are on the law firms that advise the parties; however, if the breach of an international dispute causes a lack of liquidity, then it becomes burdensome to finance the whole arbitration, not only the law firm providing with their advise but as well the payment of the fees by the arbitral tribunal and the institution, in case an institution is appointment.
There are, of course, efforts that seek to make international arbitration less of a financial burden, but when you have parties from different parts of the world with currencies that tend to be undervalued against the dollar or euro, the financial burden is higher. In other words, there is the possibility that international arbitration is not for everyone, especially those with a lack of financial assets.
Whether as it may, due to the above possible financial stress, the ICC came up with a possible solution, known as the Expedited Procedures Provisions, These procedure provisions will run from March 1, 2017 onwards. If you agreed to an ICC arbitration rule on or after March 1, 2017, then you are up to a good start to apply the expedited procedure provisions, which are part of the Rules of Arbitration issued by the ICC.
What is important is that such provisions will take precedence over any term of the arbitration agreement by virtue of Article 30 of the ICC Rules of Arbitration and Appendix VI, but what does that mean?
If you agree to the ICC rules of arbitration, then the parties agree automatically to the application of the said rules, with that they agree to the said Article 30 and the Expedited Procedure Rules under Appendix VI, which are called in conjunction as “Expedited Procedure Provisions”.
Article 30 provides that the Expedited Procedure Rules will apply in two cases depending on the date of the conclusion of the arbitral award and the amount of the dispute: for the first cases, if the amount is lower than US$2,000,000.00 and if the arbitration agreement was concluded on or after March 1, 2017 and before January 1, 2021. And for the second case, If the arbitration was concluded on or after January 1, 2021 and the amount of the dispute is US$3,000,000.00.
The amount of the dispute will be subject to review by the ICC Secretariat after the Answer to the Request of Arbitration under Article 5 of the Rules, therefore, the expedited procedure will apply if the parties to the dispute selected not to opt out to the expedited procedure, the amount is lower than US$2,000,000 or US$3,000,000 respectively.
What is the consequence of this? For once, the arbitral tribunal will be by a sole arbitrator, despite the fact that the arbitral clause or agreement says three, under this both parties will agree on the nomination of a sole arbitrator, and if the parties do not agree on the nomination of the sole arbitrator it will be the ICC Court that will appoint the arbitrator at the shortest time as possible or ASAP.
Also, article 23 of the ICC rules will not apply, which refer to the terms of reference of international arbitration where the time limits and different elements of the arbitration procedure are agreed by the parties; instead, what will apply is article 3 of appendix VI, under which no new claims shall be allowed unless the arbitral tribunal admits such new claims, The case management conference will be within 15 days from the date the file was given to the arbitral tribunal, or to agree on shorter written submissions and shorter evidence produced by the parties. Also, it opens the possibility to resolve the dispute without having hearings or witness examinations.
Also, another consequence is that the arbitral award should be rendered within six months after the case management conference, as well the fees of the arbitral tribunal will be lower than in a normal arbitration.
I know that arbitration is not perfect, and one of the possible drawbacks of international arbitration is its accessibility from a financial standpoint. However, much work has been done in order to resolve this issue. ICC is not the only one who has come up with practical solutions; other institutions have come up with a set of similar rules that provide for more expedient procedures and much less expensive procedures.
International arbitration is making its way to be more accessible for the wider business community. And that is a great step forward.