Introduction to Dispute resolution via ICC Arbitration
Dispute resolution via ICC Arbitration has always been the target of special attention by many Clients. Together, with Amicable resolution, Expert, or Dispute Adjudicator Board’s Decision, Dispute resolution via ICC Arbitration has always stood as the most prominent dispute resolution method.
Therefore, the article: “Introduction to Dispute Resolution at ICC Arbitration” prepared by CNC for the purpose of providing Clients valuable information:
- The procedures of Dispute Resolution at ICC Arbitration
- Dispute resolution-related information such as fees, duration, submission copies, appointment of arbitrators.
- Practical issues to consider when choosing Dispute resolution via ICC Arbitration
Abbreviation
For ease of reading and comprehension, CNC makes use the following abbreviations:
- ICC = International Chamber of Commerce
- ICC Court/Arbitration = ICC International Court of Arbitration of International Chamber of Commerce
- ICC Rules 2021 = ICC Rules of Arbitration 2021
Referenced materials
In this article ICC Rules 2021 serve as the legal foundation.
Moreover, CNC also provides insight based on accumulated experience throughout our operation.
General procedures of Dispute Resolution at ICC Arbitration
Legal basis: ICC Rules 2021
With the policies of “ICC Rules of Arbitration provides not just the procedure on arbitration, but a flexible legal frame” and “ICC Arbitration is appropriate for any kind of disputes”, fundamentally, a case between parties follows a pre-determined procedure unless the parties have previously agreed otherwise.
The general procedures of Dispute Resolution at ICC Arbitration are demonstrated by the following map:
General procedures of Dispute Resolution at ICC Arbitration
Step 1: Recourse to Arbitration
Request for Arbitration
The claimant submits a Request for Arbitration to the Secretariat of the ICC Arbitration in accordance with Article 4.1 ICC Rules 2021.
Request for Arbitration submission requirements
The requirement for the claimant to submit a Request for Arbitration to the ICC Arbitration is the existence of the Arbitration Clause which clearly specifies that ICC Arbitration is the dispute resolution authority. Which means:
- The Arbitration Clause is the prerequisite requirement for a party to submit a Request for Arbitration to ICC Arbitration. Neither party could submit a Request for Arbitration to the ICC Arbitration without the agreement to resolve disputes via ICC Arbitration.
- Any claim by any party that the Contract (including the arbitration clause) is nonexistent, annulled, or invalid is not the basis to deny or reduce the authority of the Arbitral Tribunal. Upon being requested, the Arbitral Tribunal or ICC Arbitration issues a preliminary award to determine the validity of the Arbitration Clause[1].
Arbitration Clauses Samples
It should be emphasized that ICC Rules 2021, similar to its predecessor ICC Rules 2017, clearly state in Article 1.2 that: “Only ICC Arbitration is authorized to manage the case in accordance with the Rules”. This calls for additional caution from both parties (and their consultants) when establishing the Arbitration Clause, to avoid potential disagreements and/or conflicts pertaining to authority.
Moreover, regarding the Arbitration Clause, the laws of some countries also require the explicit statement of the acceptance from both parties , therefore, the consensus of parties on the dispute resolution authority is that ICC Arbitration must be expressed specifically and explicitly.
For the ease of dispute resolution, the following sample of an Arbitration Clause may be referenced as:
“Any dispute arising from or relevant to this contract will be decisively resolved through the International Court of Arbitration (ICC) in accordance with the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the above-mentioned Rules”
Content of Request for Arbitration
If a party desires to have recourse with ICC Arbitration, the content of the Request for Arbitration, unrelated to other issues, includes the content listed in Article 4.3 ICC Rules 2021:
Content of the Request for Arbitration
The Claimant may also submit additional materials, together, with the Request for Arbitration if the claimant determines that such submission is reasonable and positively contributes to the dispute resolution process.
It should be noted that the adequate number of copies of the Request for Arbitration (appropriate to the number of arbitrators) must be made. For instance, in a case with 3 Arbitrators, the number of the Request for Arbitration to be submitted is at least 5 (1 copy for the Secretariat, 1 copy for each Arbitrator, and 1 copy for the Respondent).
Similarly, in cases in which there is only 1 Arbitrator, the required number of the Request for Arbitration and other materials attached there to is 3 (to be specific, 1 copy for the Secretariat, 1 copy for the Arbitrator, and 1 copy for the Respondent)
Step 2: ICC’s Secretariat receives and manages the case
Upon the receipt of Request for Arbitration, the Secretariat will check for (i) the mandatory information covered by the Request for Arbitration; (ii) the number of copies of Request for Arbitration as requested; and (iii) the advance on costs in accordance with Appendix III ICC Rules 2021.
ICC’s Secretariat inspect and receive the case
Cases in which the Claimant has yet to submit the advance on cost, the Secretariat sets the submission period. If the Claimant does not submit the advance on cost, the Request for Arbitration will not be accepted, however, the Claimant’s right to submit a similar request at a later point in time would not be affected.
If the above requirements are satisfied, the Secretariat issues a notice of acceptance of Request for Arbitration, as well as forwards a copy of the Request for Arbitration and accompanying materials to the Respondent.
Upon having issued a notice of acceptance of Request for Arbitration and forwarded a copy of the Request for Arbitration to the Respondent, the Secretariat continues with its responsibilities (such as determination of the submission period for each party and extension of submission period) until the Arbitral Tribunal is established.
Responsibilities of Secretariat prior to the establishment of Arbitral Tribunal
Emphasis on the submission and receipt of Request for Arbitration
Depending on how many requirements the Request for Arbitration satisfies, the Secretariat would respond accordingly and the Claimant cooperates with the Secretariat to clarify and supplement issues requested by the Secretariat.
Case 01 – The Secretariat returns the Request for Arbitration
In accordance with Article 4 ICC Rules 2021, the Secretariat returns the Request for Arbitration under one of the following situations:
- The Request for Arbitration fails to provide information on the Arbitration Clause; or
- The Claimant fails to comply with the duration for the submission of documents as specified in Article 3.1 ICC Rules 2021 and the administrative fees in accordance with Appendix III as determined by the Secretariat.
In the situations listed above, the Claimant may supplement evidence on the Arbitration Clause or submit the advance on cost pertaining to “ Arbitration costs and Fees”
Situations in which the Secretariat returns the Request for Arbitration
Case 02 – The Secretariat requests additions to be made to the Request for Arbitration
Cases in which the Claimant is requested to clarify, as well as supplement relevant documents and evidence are not rare occurrences.
Situations in which the Claimant may be requested to clarify and supplement information including:
The Claimant does not make the nature, context, and foundation of the Request for Arbitration clear.
Request for Arbitration containing claims that are conflicting with each other.
The Claimant neglects to clarify the dispute value or the compensation value
The Claimant has yet to include important information such as: Place of Arbitration, Governing Law, and Language of the Arbitration.
In these situations, the Secretariat issues a Notice of Adjustment and Supplement to complete the Requests for Arbitration in accordance with Article 4 ICC Rules 2021.
Upon receipt of the notice, if the Claimant does not supplements or adjust as requested, the Secretariat returns the Request for Arbitration. If the Claimant supplements or adjust as requested, the Secretariat accepts the Request and determines the submission period for the documents specified in Article 3.1 ICC Rules 2021 and advance on costs.
Case 03 – The Secretariat accepts and determines the submission period for the required documents and advance on cost
Together with the Request for Arbitration, the Claimant submits the documents as specified in Article 3.1 ICC Rules 2021 and submits the advance on cost in accordance with Appendix III (“Arbitration Costs and Fees”). The fees to file a case in accordance with ICC Rules 2021 is $5,000.00 USD.
Cases in which the Request for Arbitration is accepted but the Claimant has yet to perform one of the above requests, the Secretariat gives the Claimant a fixed duration to perform these requests.
Afterward, the Secretariat notifies both the Claimant and the Respondent of the acceptance of Requests for Arbitration.
Step 3: Respondent’s Response
Within 30 days upon receipt of the Secretariat’s notice, the Respondent is obligated to:
Respondent’s Obligation
The Secretariat potentially extends the duration for the Respondent to submit a response, counterclaim (if any). Both the Response and Counterclaim must contain the content listed in Article 5.1 and Article 5.5 ICC Rules 2021.
However, under any circumstance, the Respondent must choose the second Arbitrator or together with the Claimant appoint the sole Arbitrator. If the Respondent neglects to appoint the second Arbitrator or both parties fail to appoint the sole Arbitrator, ICC Arbitration will appoint the Arbitrator(s) in accordance with ICC Rules 2021.
Emphasis on the submissions:
In each submission, both Parties must adequately explain their perspective on the concerned issues and ensure compliance with ICC Rules 2021 pertaining to the content and order of submissions.
Accordingly:
Emphasis on the submissions of each party
Moreover, regarding the format of submissions, the submissions are likely to follow the forms issued by each party or prepared by each party’s legal consultant.
Step 4: Establishment of the Arbitral Tribunal
Number of Arbitrators
In accordance with ICC Rules 2021, the requested disputes are resolved by the Arbitral Tribunal constituted by the sole Arbitrator or an Arbitral Tribunal consisting of three (3) Arbitrators.
If both Parties unsuccessfully agree on the number of Arbitrators, ICC Arbitration appoints a sole Arbitrator for the Arbitral Tribunal, unless ICC Arbitration determines that the case requires that the Arbitral Tribunal must consist of 3 Arbitrators for the dispute to be resolved.
The Procedure of selecting and appointing Arbitrators for the Arbitral Tribunal
The establishment of an Arbitral Tribunal in accordance with ICC Rules 2021 contains some interesting elements. Specifically, ICC Rules 2021 pay great attention to the establishment of an Arbitral Tribunal, the authority of the Arbitral Tribunal and the roles of Secretariat.
Accordingly, the establishment of an Arbitral Tribunal contains the following possibilities:
Establishment of an Arbitral Tribunal constituted by the sole Arbitrator
The procedure of selecting and appointing Arbitrators for the Arbitral Tribunal constituted by the sole Arbitrate is fairly simple. Accordingly, Article 12.2 and Article 12.3 ICC Rules stipulate that the parties must reach an agreement on the sole arbitrator within 30-days after the receipt of the copy of Request for Arbitration. If agreement is unsuccessful or no appointment is made within the given duration, ICC Arbitration will appoint the sole arbitrator (except in cases in which disputes are resolved through an Arbitral Tribunal consisting of 3 Arbitrators)
Cases in which the Arbitral Tribunal is constituted by the sole Arbitrator would be established
If so, the procedures to establish the Arbitral Tribunal constituted by the sole Arbitrator is summarized as follows:
The procedures to establish the Arbitral Tribunal constituted by the sole Arbitrator
Note:
Refer to Rule 12.
Establishment of an Arbitral Tribunal consists of three Arbitrators
Depending on whether or not the Claimant appoints an Arbitrator and such appointment is objected by the respondent, the Secretariat reviews the appointed candidate and confirms if said Arbitrator is chosen to be part of the Arbitral tribunal. Vice versa, if the Secretariat deems the appointed candidate to be unfit for the Arbitral Tribunal, the Secretariat will inform ICC Arbitration of such for the latter to decide.
The above procedure is also applied to each Arbitrator candidate appointed by the Respondent (if any). If so, the procedures to establish the Arbitral Tribunal consists of three Arbitrators and is executed as follows:
The procedures to establish Arbitral Tribunal consists of 3 Arbitrators
Therefore, regarding the establishment of the Arbitral Tribunal consisting of 3-Arbitrators, a Claimant and a Respondent appoints one Arbitrator respectively. Afterward, ICC Arbitration appoints the President of the Arbitral Tribunal. However, if the parties agreed on another method to appoint the President of the Arbitral Tribunal, then, within 30-days, the parties complete the appointment of the President of the Arbitral Tribunal. If no President of the Arbitral Tribunal is appointed within 30-days, ICC Arbitration will appoint the President of the Arbitral Tribunal.
Furthermore, if a party finds that there are signs that the appointed Arbitrator(s) (either of his own or other party’s) is partial, biased, or otherwise unethical, that party could submit a challenge along with the details, content, and context as the foundation of the challenge to the Secretariat. For the challenge to be admissible, it must be submitted by a party to the Secretariat either within 30-days from receipt by that party of the notification of the appointment of arbitrator, or within 30-days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based, if such date is subsequent to the receipt of such notification.
ICC Arbitration decides on the admissibility and, at the same time, if necessary, on the merits of a challenge (after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the arbitral tribunal, to comment in writing within a suitable period of time).
Arbitrator Standards
According to Article 11.1 ICC Rules 2021, the Arbitrator must be impartial, independent, and transparent throughout the dispute resolution.
If the appointed Arbitrator is suspected of being partial, or unable to feasibly comply with the requirements of ICC Rules 2021, the appointed Arbitrator is replaced by another Arbitrator, either through the requests of the parties or via decision of ICC Arbitration.
Step 5: Admission and Management of the cases
Immediately upon the Arbitral Tribunal being established, the Secretariat transmits the dossier, material, and information of the cases in accordance with Article 16, ICC Rules 2021. The Arbitral Tribunal’s role is to manage the cases in the most expeditious and efficent manner as requested by Article 22 ICC Rules 2021.
Accordingly, the Arbitral Tribunal usually (1) prepares Terms of Reference (2) works with parties to agree on the method to resolve the dispute and (3) agrees on the submission schedule and list of works to be done.
3 main responsibilities of the Arbitral Tribunal
Terms of Reference
Terms of reference, as specified in Article 23, ICC Rules 2021, are documents that record the submission or hearings of the parties, including the following main content:
Content of Terms of Reference
The Terms of Reference must be signed by the Parties and the Arbitral Tribunal prior to submission to ICC Arbitration.
Work with Parties on case management
In accordance with Article 24, ICC Rules 2021, the Arbitral Tribunal organizes hearings/meetings with the Parties to find the best and most feasible method for the Parties to resolve the dispute.
The hearings/meetings may be organized in-person or online, depending on the decision of the Arbitral Tribunal and the possibilities of the parties to participate.
Agree on the Submission Schedule
Based on the content of the Terms of Reference, and the case management hearings, the Arbitral Tribunal identifies the works and missions that must be executed by the parties and the Arbitral Tribunal.
The content of the Submission Schedule and the submission method depends on the nature of each dispute and the manner with which the Tribunal manages the case. For example, disputes in which a party raises an objection pertaining to authority, a preliminary award on the Arbitral Tribunal’s authority must be issued in advance and independent of other issues.
Similarly, for compensation requests for damages incurred by the Contractor due to the overextension of the performance program, the Arbitral Tribunal issues a preliminary award to determine the duration on which the Contractor’s compensation is based prior to the determination of detailed compensation amounts received by the Contractor from such duration.
Step 6: Dispute resolution hearings
The Arbitral Tribunal, in accordance with the request of the parties, or by its own decision, organizes dispute resolution hearings with the time and location fixed by the Arbitral Tribunal.
The manner with which the hearings are held are recommended by the Arbitral Tribunal, and the recommendation will be sent to the parties for reference and for the selection of the most suitable method for the content and context of the case. The hearing may be held in person, or the parties could communicate online via video conference, teleconference, telephone, or any other suitable form of communication.
Dispute resolution hearings are not to be interrupted or suspended in cases where a party is absent without reasonable explanation despite being duly summoned.
The parties may participate in the hearing either by themselves or through their legal representatives. Aside from that, the Parties’ legal consultants could also join in the hearings.
The Arbitral Tribunal accepts responsibility for the Dispute resolution hearing, parties participating in the hearing are entitled to express their opinions and perspectives. Save with the approval of the arbitral tribunal and the parties, persons not involved in the proceedings will not be admitted.
Step 7: Closing of the proceedings and Issue Award
Draft Award
After the final hearing, the Arbitral Tribunal will
Summarize the Arbitral Tribunal’s mission upon the closing of the proceedings
Attention: After the final hearing regarding the matters to be decided in the award is held, the Arbitral Tribunal will declare the proceedings closed in accordance with Article 27 ICC Rules 2020. Upon this declaration, no further submissions or presentations may be made.
In accordance with Article 31 ICC Rules 2021, the final award will be issued within 6-months from the date of the final signature of the parties of the Terms of Reference and this duration may be extended. However, ICC Rules 2021 allows for a more flexible time limit to issue awards based on either the decision of the Arbitral Tribunal or for the most part, based on the consensus of the parties. Accordingly, the parties could set a different time limit based on the established procedural timetable (mentioned above). ICC Arbitration might extend the time limit, provided that there is a logical request from the Arbitral Tribunal.
After declaring the closure of proceedings, the Arbitral Tribunal will inform the Secretariat of the date by which the Arbitral Tribunal expects to submit its draft award to obtain ICC Arbitration’s approval. Accordingly, all awards must be examined and approved by the ICC Arbitration as to their forms.
ICC Arbitration may lay down modifications as to the form of the award and draw the Arbitral Tribunal’s attention to some points of substance. The Scrutiny of the Award is a mechanism by which to ensure the issued award complies with the forms of the Court, thereby limiting the risks of being cancelled or not being recognized by a competent authority of parties to the New York Convention of 1958.
ICC Arbitration’s role in scrutinizing Award
Attention: When the arbitral tribunal is composed of more than one arbitrator, an award is made by a majority decision. If the award is not accepted by the majority, the award shall be made by the president of the arbitral tribunal alone.
Step 8: Correction and Interpretation of the Arbitration Award
Award Correction
The Arbitral Tribunal may, on its own, correct any errors pertaining to printing, computer input, or comparable errors in the Award, provided that these correction are submitted to ICC Arbitration for approval within 30-days from the date when the Secretariat signs the Award in accordance with Article 35.1 ICC Rules 2021.
Any application from any party for the correction of errors mentioned in Article 36.1 must be submitted to the Secretariat within 30-days from the receipt of the Award by that party.
Award Interpretation
Any application for Award Interpretation by any party must be submitted to the Secretariat within 30-days from the receipt of the Award by that party.
Step 9: Additional Award
Furthermore, if any party requests that the Tribunal issue an additional award for issues that any of the parties had brought up during the proceedings but have not yet been resolved by the Arbitral Tribunal , that party must submit the application to the Secretariat within 30-days from the receipt of the Award by that party.
The procedures to make addition to ICC Arbitration Award
Upon receipt of the application for correcting, interpreting, and additions/amendments to the Award, the Arbitral Tribunal will notify the other Party of such receipt and grant that party a time limit of no more than 30-days to submit any comment thereon.
Upon the expiration of the above duration or other durations stabilized by ICC Arbitration, the Arbitral Tribunal will submit its opinions on the application for correcting, interpreting, and additions/amendments together with the Draft Award to ICC Arbitration.
The correction and interpretation of the Award would be made in the Appendix and become a part of the Award.
Contact:
CNC hopes that the above information is clear and useful to CNC’s Clients and potential Clients. However, in the absence of understanding or the need for further information pertaining to the FIDIC Gold Book 2019 is required, please contact us at:
CNC Vietnam Law Firm Company Limited
Address: 28 Mai Chi Tho Street, An Phu Ward, Thu Duc City, Ho Chi Minh City, Vietnam
Phone: (84) 28-6276 9900
Hot line: (84) 916-545-618
Email: contact@cnccounsel.com
Website: cnccounsel
In charged by
Mr. Le The Hung | Managing Partner
Phone: (84) 916 545 618
Email: hung.le@cnccounsel.com
Or
Mrs. Nguyen Thi Kim Ngan | Partner
Phone: (84) 919 639 093
Email: ngan.nguyen@cnccounsel.com
Disclaimer:
This article was prepared or used for the purpose of introducing or updating clients/potential clients on information pertaining to a specific matter and/or the developments of legal perspectives in Vietnam. The information contained within this article DOES NOT constitute legal advice in any form and may be subject to change without prior notice.
[1] Article 6.4 ICC Rules 2021.
