All posts by ram6023

ALR 2016 - 2017

Differing Standards of Arbitral Neutrality

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By: Susanna Chehata

There are many arbitral bodies and standards, but this post will examine the different standards for arbitrators’ neutrality in four different sets of rules.

Both the Singapore International Arbitration Centre (“SIAC”) and the Stockholm Chamber of Commerce (“SCC”) have direct statements that “arbitrators must be impartial and independent.”  Furthermore, the rules of SIAC and the SCC both state that if the parties in the arbitration are of different nationalities, then the arbitrator shall be of a different nationality from the parties, unless otherwise agreed. In contrast to the rules of these two arbitral bodies, the United Nations Commission on International Trade Law (“UNCITRAL”) and the Permanent Court of Arbitration (“PCA”) have rules which state that “nominees for the role of arbitrator must disclose any circumstances that give rise to justifiable doubts about their impartiality or independence.”

When comparing these different rules, it is notable that the rules of SIAC and the SCC are stricter than the UNCITRAL and PCA rules. The former provide for a blanket refusal of non-neutral arbitrators, but the latter mandates only disclosure of circumstances that would give rise to doubts of neutrality. Presumably, at that point, the other party may accept or reject the nominee based on such information

While these different approaches could potentially lead to the same result of disallowing partial arbitral nominees in some situations, in other situations it is possible that there would be a different result. For example, a questionably neutral arbitrator could be immediately rejected under the SIAC and SCC rules, but be permitted to arbitrate under the UNCITRAL and PCA rules, so long as disclosure was made.

It seems as though the latter system is likely more effective and efficient.  The goal of arbitration is to provide for an alternate way to resolve disputes, without using the court system.  Of course, there must still be procedural safeguards to ensure a just result.  However, disclosure of circumstances that give rise to doubts concerning impartiality would seem sufficient to ensure that the proceeding is fair. Additionally, when parties choose arbitration over the court system, they must be cognizant that they are foregoing some procedural safeguards of the courts, such as an unbiased decision-maker, in exchange for a speedier and cheaper option.  Thus, disclosure of potentially partial arbitrators should suffice to meet the goals of arbitration.

Source:

https://globalarbitrationnews.com/3168-2-20170112/

ALR 2016 - 2017

Will Brexit Impact Arbitration in London? Time Will Tell

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By: Susanna Chehata

Over the past few decades, London has become a major seat for international arbitration due to the presence of the London Court of International Arbitration (“LCIA”), along with many other arbitral bodies.

However, questions have been raised concerning the United Kingdom’s (“UK”) continued prominence in international arbitration because on June 23, 2016, the UK’s electorate voted to leave the European Union, a decision commonly known as “Brexit.”  Some scholars believe that Brexit will have certain ramifications, mainly because the UK will no longer be bound by EU legislation requirements, so it could create confusion. On the other hand, others believe that Brexit will not impact international arbitration in London because it is not governed by EU law, but rather, by international law.

On the one hand, some believe that Brexit will impact international arbitration in the UK.  Currently, when the parties do not have a choice of law clause in the arbitral clause, the law is determined by the Rome I Regulation, which governs European Union conflict of laws issues, and to which the UK had acceded.  Once Brexit is fully implemented, the regulation will no longer apply in the UK, so English law will govern the choice of law question.  However, there is the possibility that the EU and the UK will reach an agreement in which the UK continues to abide by the Rome I Regulation.

On the other hand, some scholars believe that Brexit will not impact London’s involvement in international arbitration. International arbitration is primarily governed by the 1958 New York Convention on the Enforcement and Recognition of Foreign Arbitral Awards to which the UK is a signatory. After Brexit, the UK will remain a signatory and those enforcement rules will continue to apply.  Additionally, the factors that cause parties to choose London for arbitration largely remain the same and independent of EU membership: a large pool of arbitration specialists, the strong Arbitration Act of 1996, and the opportunity to apply English law (although the arbitral seat does not automatically decide the substantive law).

Regardless of the differing views on this matter, scholars on both sides of the argument will most likely agree on at least one thing: only time will tell.  As with many uncertainties surrounding Brexit, we cannot fully and accurately predict the outcome, until the time comes.

 

Sources:

https://globalarbitrationnews.com/price-independence-brexit-international-arbitration-20160718/http://www.shearman.com/~/media/Files/NewsInsights/Publications/2016/10/Brexit-Potential-

http://www.shearman.com/~/media/Files/NewsInsights/Publications/2016/10/Brexit-Potential-Implications-for-International-Arbitration-in-London-IA-10182016.pdf

ALR 2016 - 2017

The People’s Republic of China: Is Arbitration Actually Litigation?

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By: Susanna Chehata

As arbitration has vastly expanded across the globe in the recent decades, each county has developed its own attitude and laws concerning the enforceability of arbitration agreements.  And while some countries like the United States favor enforceability, other countries have more stringent standards for arbitration agreements and procedures.  The People’s Republic of China (“PRC”) has seen an increase in commercial litigation in the past few years, and courts can be called on to enforce or vacate the award.

In June 2016 in the People’s Republic of China (“PRC”), the Taizhou Intermediate People’s Court refused to enforce an International Chamber of Commerce (“ICC”) award on public policy grounds. The arbitration clause stated that the arbitration would be conducted pursuant to the ICC Rules, but did not specify the seat of the arbitration. Rather, it stated that if one party commenced arbitration, the other party would select the seat. The court held that the arbitration clause was invalid for failure to designate an arbitral institution, and such a result could have been avoided if the parties had specified an arbitral seat in the arbitration clause.

Additionally, in a September 2016 article published on Global Arbitration News titled “Improper Service Poses Risk for Enforcement of Award,” authors Peng Shen and Hailin Cui address how improper service in arbitration proceedings is a ground that PRC courts use to set aside or refuse to enforce arbitral awards made either in China or overseas. Some examples of improper service of process include:  defective process (which could include negligible typographical errors), no reasonable second attempt to serve the other party, intentionally hiding the valid address of the other party, and the receipt of the arbitration papers by a third-party.  One of the authors’ recommendations to avoid this ruling is to draft a highly specific arbitration clause to include specific requirements for service of process.

These incidents demonstrate that the PRC courts strongly prefer highly particular and specific arbitration clauses that fully outline the details of the arbitration. In some respects, it may be advantageous to have such a specific arbitration clause.  For example, specifying the seat of arbitration at the outset may be important, as this factor may have a profound impact on the proceedings. However, in other instances, having such a specific clause may not be necessary to serve the purpose of arbitration, in which parties have the flexibility to determine how to proceed. The goal of arbitration is to provide a form of alternate dispute resolution outside of the confines of ordinary litigation. If courts require such specificity that such that it begins to mirror the specificity of the filings requirements of litigation, the goal of arbitration may become overridden and arbitration may begin to adopt a court-like appearance.

 

Other resources:

 

http://globalarbitrationnews.com/improper-service-poses-risk-enforcement-awards/

http://globalarbitrationnews.com/failure-specify-arbitral-seat-arbitration-clause-may-result-unenforceable-award/

ALR 2016 - 2017

England and Wales: A “Pro-Arbitration” Trend

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By: Susanna Chehata

In 2016, the High Court of England and Wales, in two cases, ruled in ways that could be classified as “pro-arbitration.”  In the first case in February 2016, the Court refused to set aside an arbitral award for the mere taint of corruption and bribery.  In the second case in April 2016, the Court refused to honor the claimants’ request to appoint an arbitrator under Section 18 of the UK Arbitration Act of 1996 because of the nature of the disagreement between the parties, as it concerned party appointment.

In February 2016, the Court refused to set aside an arbitral award in National Iranian Oil Company v Crescent Petroleum Company International Ltd [2016] EWHC 510 (Comm).  The dispute began between the National Iranian Oil Company (“NIOC”) and Crescent Petroleum Company International Limited (“Crescent”) who had entered into a contract for the supply and purchase of gas. The contract included an arbitration clause, requiring arbitration in England and Wales. Crescent commenced arbitration against NIOC for breach of contract for failure to deliver gas, and NIOC raised the defense that the contract had been procured by bribery.  The arbitrators issued an award in favor of Crescent and stated that the contract had not been procured by bribery.  NIOC appealed to the court and argued that there was corruption, and, in the alternative, that the “mere taint” of corruption was sufficient to void the contract and set aside the arbitral award.  The Court disagreed and held that because there was no evidence of corruption, the “mere taint” of corruption was not enough to set aside the arbitral award, and thus, upheld the award, promoting arbitration.

In April 2016, the Court refused to appoint arbitrators, leaving the decision to the parties.  The claimant entered into three, almost identical, insurance policies with three different companies.  In the arbitral proceedings with all three of the companies, each of the companies each appointed different arbitrators.  The claimant, however, appointed the same arbitrator for all three proceedings, who in turn nominated a third arbitrator, Mr. Collins, to chair all three arbitrations.  The three companies opposed this scheme and the claimant petitioned the Court to appoint Mr. Collins as chair to ensure efficiency and consistency.  The Court refused to exercise its authority to appoint an arbitrator. The Court stated that in arbitration, “considerations of party choice, privacy and confidentiality are relevant and important” and thus, the defendants had the right to object.  While a hallmark of arbitration is efficiency, the Court refused to intervene and order the arbitrator to ensure efficiency.  Rather the Court looked to a different hallmark of arbitration, party choice, in making this decision.  Thus, this decision could also be viewed as “pro-arbitration” because although it does not promote efficiency, it promotes party choice.

These two decisions are consistent with one another and the goals of arbitration. Both courts essentially left the arbitration proceedings to play out among the parties, and without court intervention.  After all, arbitration is alternative dispute resolution.

 

Sources:

http://globalarbitrationnews.com/setting-aside-arbitral-awards-on-the-basis-of-bribery-or-corruption-is-the-taint-of-bribery-sufficient/

http://globalarbitrationnews.com/the-powers-and-limitations-of-the-court-in-arbitration/

ALR 2016 - 2017

What is Arbitration? Well You Should Know Because it May Just Control the Care of your Parents…

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By: Lauren Piciallo

According Webster dictionary, arbitration is a hearing and determination of a disputed case by an arbitrator. See https://www.merriam-webster.com/dictionary/arbitration. In short, arbitration is an alternative form of private dispute resolution separate from the court system; but if you have more questions about what arbitration is, now is the time to do your research. While arbitration may not regularly flow through the mind of the most people, it does impact most people’s lives. Many people are just a click away from entering the realm of arbitration, as many consumer disputes are resolved via arbitration pursuant to your contractual agreements.

Why does arbitration exist? Well arbitration can offer industries many benefits. Arbitration may be shorter, cheaper, and offer more specialized expertise than the court system. A strong federal policy favoring arbitration exists in United States law, and in most cases parties who agree to arbitration in a contract will go through with the process of arbitration should a conflict arise. Many contractual agreements are controlled by arbitration should a dispute arise including many consumer agreements or employment agreements. Arbitration agreements may be found in the agreement between a nursing home and its residents and families of residents. According to the New York Times, nursing home agreements which contained arbitration agreements have helped reduce the industry’s “legal costs, but it has stymied the families of nursing home residents from getting justice…”. https://www.nytimes.com/2016/09/29/business/dealbook/arbitration-nursing-homes-elder-abuse-harassment-claims.html?_r=0.

Well, that was until an agency within the Health and Human Services Department “issued a rule that bars any nursing home that receives federal funding from requiring that its residents resolve any disputes in arbitration instead of court.”  Id. The rule cuts “funding to facilities that require arbitration clauses as a condition of admission.” Id.  According to the New York Times, “this rule will affect nursing homes with 1.5 million residents and promises to deliver major new protections.” Stories like the one about a 100-year-old woman who was murdered by her roommate, which was initially blocked by the court, will no longer be blocked. Id.

Nevertheless, this change has raised controversy within the industry. The New York Times reported that Mark Parkinson, the president and achieve executive of the American Health Care Association, stated that the “change on arbitration ‘clearly exceeds’ the agency’s statutory authority and was ‘wholly unnecessary to protect resident’s health and safety.’” See id. To those within the nursing home industry, withholding the use of arbitration withholds a less costly alternative to court. Id. Further, some state that the new rule may drive up costs and force some homes to close. Id.  However, others find that the rule will prevent embarrassing practices from being kept “under wraps.” Id.

ALR 2016 - 2017

Supreme Court to Hear Murphy Oil USA v. NLRB

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By: Lauren Piciallo

The Supreme Court will hear Murphy Oil USA, Inc. v. N.L.R.B., which raises significant questions about the conflict between arbitration and class action suits in the employment context. Among other holdings, the Fifth Circuit held that Murphy’s Oil “did not commit unfair labor practices by requiring employees to sign its arbitration agreement or seeking to enforce that agreement in federal district court.” 808 F. 3d 1013, 1015 (2015). While such a holding is common practice in arbitration, it had the effect of waiving the employees’ rights to pursue class actions under the National Labor Relations Act (“NLRA”).

The arbitration agreement stated that “any and all disputes or claims [employees] may have… which relate in any manner … to …. employment” must be submitted to individual arbitration. Id. at 1019.  Further, parties to the agreement “waive their right to… be a party to any group, class or collective action claim… in any other forum.” Id.

The holding in D.R. Horton, Inc., 357 N.L.R.B. 184 (2012), is relevant to this case. In D.R. Horton, the Board held that “agreements requiring employees to waive their right to pursue class and collective claims “restricted employees’ Section 7 ‘right to engage in protected concerted activity in violation of Section 8(a)(1).’” D.R. Horton, Inc., 375 N.L.R.B. 184 (2012). Section 8(a) makes it unlawful for an employer to commit unfair labor practices. 29 U.S.C. § 158(a).  However, the Fifth Circuit later overruled the Board’s holding stating that: “[1] the NLRA does not contain a “congressional command overriding” the Federal Arbitration Act (“FAA”); and (2) “use of class action procedures… is not a substantive right” under Section 7 of NLRA.”  Murphy Oil USA v. NLRB, 808 F. 3d at 1016.

Though the Fifth Circuit found that no violation of the NLRA occurred where an employer restricted class or collective actions in an employment agreement, the Board again reaffirmed D.R. Horton when the Board heard the case for Murphy Oil USA.  Id. at 1017. The Board relied on the holding in Bill Johnson’s Restaurants, Inc. v. NLRB, where the Supreme Court held that for a lawsuit to be enjoinable, the “lawsuit prosecuted by the employer must (1) be “baseless” or “lack[ing] a reasonable basis in fact or law” and be filed “with the intent of retaliating against an employee for the exercise of rights protected by” Section 7, or (2) have “an objective that is illegal under federal law.” Id. at 1021.  In the present case, the Fifth Circuit found that Murphy Oil’s motion to dismiss and compel arbitration was not “baseless.” Id.

 This case may have important implications on class action suits in the employment context. As can be seen from the facts of this case, some employees are prevented from bringing class actions against their employers. This may have the effect of dissuading plaintiffs from bringing actions due to the cost of arbitration. Here, however, if the court decides on this issue, class action suits may be protected, and employees may be able to bring class action suits against the employer.

ALR 2016 - 2017

District Court for the Western District of Pennsylvania Denies Validity of Agreement to Arbitrate

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By: Lauren Piciallo

This blog will describe the Western District of Pennsylvania’s analysis in Scott v. Education Management Corporation, which illustrates an important practice of resisting arbitration agreements that were formed as a condition of employment after a legal dispute arose. In Scott v. Education Management Corporation, the District Court found that the parties did not agree to arbitrate claims. Scott v. Education Management Corporation, No. 2-14-cv-00537 (D.C. Pa. 2016).

The dispute arose when Mr. Scott filed an Age Discrimination complaint, and Mr. Jones filed a Race Discrimination complaint, in August of 2012, against the Education Management Corporation (“EDMC”).  Id. at 3. After the complaints to the Equal Employment Opportunity Commission (“EEOC”) were filed, in late September to early October, EDMC enacted a new policy for alternative dispute resolution. Id. The policy stated that it “intended to create the exclusive means by which all work-related disputes between [EDMC] … and its employees will be promptly addressed and fairly resolved.” Id. This included all claims regarding Employment Discrimination. Id. The company then expressed that the new alternative dispute resolution policy was a “condition of continued employment.” Id. at 4. After the attorney for both Mr. Scott and Mr. Jones wrote to express the illegality of such a policy, both men were terminated from their positions. Id.  After the attorney requested a right to sue from the EEOC, both men filed, in court, complaints against EDMC alleging that the company disEncriminated and retaliated against them, in violation of the ADEA, Title VII, and Pennsylvania common law. Id. The trial court dismissed both complaints with reference to the arbitration policy. Id.

             On appeal the District Court noted that all valid agreements to arbitrate should be enforceable if the dispute is within the scope of the arbitration agreement. Id. at 7. Under Pennsylvania Law, which the District Court applied, a valid contract for arbitration exists if “(1) both parties manifested an intention to be bound by the agreement; (2) the terms of the agreement are sufficiently definite to be enforced and (3) there was an exchange of consideration.” Id. While continued employment is a manifestation of assent and the men continued to be employed, the court found that assent was questionable due to the individuals’’ immediate objection via their attorney to the alternative dispute resolution policy. Rather, the court reiterated the Pennsylvania Superior Court in Temple Univ. Hosp., Inc. v. Healthcare Mgmt. Alternatives, Inc., stating “[a] contract cannot be implied when assent has been expressly disavowed.” Id. at 9 (citing Temple Univ. Hosp., Inc. v. Healthcare Mgmt. Alternatives, Inc., 764 A.2d 587, 594 (Pa. Super. Ct. 2000)). This result was supported by case law as agreements to arbitrate must be “clear and unmistakable.” Id. at 9.

Though this case is not binding upon higher courts, it notes an important practice of resisting alternative dispute resolution policies put in place after the suit has been brought against the company. By resisting the validity of the arbitration clause, the attorney was able to prove that neither party agreed to the alternative dispute resolution policy. As a result, neither party had to submit to the arbitration agreement.

ALR 2016 - 2017

NJ State Police – Can Arbitration Lead to the Solution of the Years’ Long Wage Impasse?

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By: Lauren P.

It has been years since New Jersey State Police have seen a marginal rise in their income, unlike that of other states. In fact, the State Police have not seen a new contract detailing their salary since 2012.[1]

Recently, the Division of the State Police (hereinafter the “Division”) and the State Troopers NCO Association of New Jersey (hereinafter the “NCOA”) submitted to arbitration pursuant to the Police and Fire Interest Arbitration Reform Act[2] to seek a resolution to the years of negotiating.[3] Unfortunately for the State Troopers, the arbitrator whom adjudicated the State Police’s claim for increased wage, held that there would only be a 1% pay increase.[4]

Under New Jersey State law,[5] the arbitrator should weigh the following factors:

“Interests and welfare of the public”

  1. “Comparison of the wages, salaries, hours, and conditions of employment of the employees involved in the arbitration proceedings with the wages, hours, and conditions of employment of other employees performing the same or similar services and with other employees generally;”
  2. “Stipulations of the party;”
  3. “The lawful authority of the employer;”
  4. “The financial impact on the governing unit, its residents, the limitations imposed upon the local unit’s property tax levy…;”
  5. “The cost of living;”
  6. “The continuity and stability of employment…;”
  7. “Statutory restrictions imposed on the employer.”

Statutory restrictions also limited the arbitrator to increasing the annual pay by no more than 2%.[6]

Specifically, the arbitrator refused to look at comparable wages, salaries, hours and conditions of employment in other States. Comparatively, the average amount that neighboring states (Delaware, Pennsylvania, Rhode Island, New York, Connecticut, and Massachusetts) receive in wage increase is on average 2.75% a year.[7] However, the Division argued that other state’s wages are “irrelevant” because of different statutory structures, and the arbitrator agreed.[8]

With regard to the fifth factor the arbitrator stated: “I conclude that despite New Jersey’s fiscal problems this is a modest wage increase that would have limited financial impact on the State.”[9] Though retirements have been on the rise, the arbitrator believed that “the small increase will hopefully contribute to the continuity and stability.”[10]

Endnotes:

[1] New Jersey 101.5, New Jersey State troopers reject 1.25% salary increase, say they want better benefit, http://nj1015.com/nj-state-troopers-reject-1-25-salary-increase-say-they-want-more/.

[2] N.J.S.A. 34:13(e)(1).

[3] New Jersey v. State Troopers NCO Association of New Jersey, IA-2016-007 (Feb. 1, 2016) (Cure, Arb.), available at http://www.perc.state.nj.us/IAAwards.nsf/IAUpdates/56E7EE5A86BA11D985257F5D0050C02F/$File/IA-2016-007.pdf?OpenElement.  

[4] Id.

[5] N.J.S.A. 34:13-6(g).

[6]  N.J.S.A. 34:13A-16.7(b).

[7] New Jersey v. State Troopers NCO Association of New Jersey, IA-2016-007 (Feb. 1, 2016) (Cure, Arb.), available at http://www.perc.state.nj.us/IAAwards.nsf/IAUpdates/56E7EE5A86BA11D985257F5D0050C02F/$File/IA-2016-007.pdf?OpenElement.  

[8] Id.

[9] Id.

[10] Id.

ALR 2016 - 2017

Wells Fargo Fraud Prompts Congressional Action on Mandatory Clauses

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By: Jonathan Vaitl

In December 2016, identical bills were introduced in both the U.S. House[1] and Senate[2] that would allow consumers to avoid mandatory arbitration clauses in cases of fraud.

The bills came on the heels of the bombshell Wells Fargo scandal, where Wells Fargo employees fraudulently opened deposit and credit card accounts in customers’ names, which resulted in fees wrongfully charged to customers. Although the Consumer Financial Protection Bureau (“CFPB”) ultimately fined Wells Fargo $185 million and ordered the refund of $5 million in fraudulent fees, when Wells Fargo customers attempted to file suit, they ran into a mandatory arbitration roadblock.

Wells Fargo argued in cases before the courts of the District of Utah[3] and the Northern District of California[4] that, despite the fraud and deceit, customers were bound by the mandatory arbitration clauses, which prohibited class arbitration, included in the terms customers agreed to when they opened their accounts. In a press release, Sen. Sherrod Brown (D-OH), who introduced the Senate bill, said, “Forced arbitration is shielding Wells Fargo from being held accountable for tanking customers’ credit scores and charging them fraudulent fines.” Brown further stated: “Wells Fargo’s customers never intended to sign away their right to fight back against fraud and deceit. We need to give customers back their ability to seek justice in court so they can be made whole again.”

The bills would invalidate any pre-dispute arbitration agreement in a dispute related to a credit card account or a personal deposit account opened without the request of, or an application from, the customer. It is not clear how much support either bill has. The Senate bill has 14 cosponsors, all Democrats and Sen. Bernie Sanders (I-VT). Likewise, the House bill, introduced by Rep. Brad Sherman (D-CA-30) has 14 cosponsors, all of whom are Democrats.

The bills also come at a time when the CFPB expects to promulgate a final rule that would prohibit financial institutions from enforcing arbitration agreements that disallow class arbitration.[5] The CFPB was expected to issue its final rule in February of this year; however, some believe that it may come before President-elect Donald Trump’s inauguration.[6]

Regardless of the outcome of these bills, their introduction, along with the impending final rule from the CFPB, indicates a renewed interest among lawmakers to wind back the court-approved power of financial institutions in forcing consumers into mandatory, class-restrictive arbitration agreements, even in the face of rampant fraud.

Endnotes:

[1] Justice for Victims of Fraud Act of 2016, H.R. 6423, 114th Cong. (2016).

[2] Justice for Victims of Fraud Act of 2016, S. 3491, 114th Cong. (2016).

[3] Mitchell v. Wells Fargo Bank N.A., No. 16–00966 (D. Utah complaint filed Sept. 16, 2016).

[4] Jabbari v. Wells Fargo & Co., No. 15–cv–02159–VC (N.D. Cal. Sept. 23, 2015).

[5] Arbitration Agreements, 81 Fed. Reg. 32829 (May 24, 2016).

[6] Jessica Karmasek, CFPB Will Likely Issue Rule Targeting Arbitration Before Trump Takes Over, Attorney Says, Forbes (Dec. 26, 2016, 8:10 AM), http://www.forbes.com/sites/legalnewsline/2016/12/26/cfpb-will-likely-issue-rule-targeting-arbitration-before-trump-takes-over-attorney-says/#69b999abbcf0.

ALR 2016 - 2017

International Court of Arbitration Amends Arbitration Rules to Streamline Smaller Claims

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By: Jonathan Vaitl

The International Chamber of Commerce International Court of Arbitration (“ICC Court”) put amended rules into effect as of March 1, 2017, that highlights the ICC Court’s priority for streamlining smaller claims. The new Expedited Procedure Rules automatically apply to claims that do not exceed USD 2 million (“Small Claims”), although the parties may opt out.[1]

According to the ICC Court’s 2015 statistics, 8.1 percent of disputes submitted for arbitration constituted small claims.[2] This change to the rules suggests the ICC’s expectation that the number of small claims will become an even greater share of total claims in the years to come.

Under the Expedited Procedure Rules, the ICC Court may appoint a sole arbitrator as quickly as possible,[3] with a case management conference to occur no more than 15 days after the date the tribunal receives the file.[4] The tribunal will also have the option of deciding the matter solely on the basis of the documents submitted, without a hearing or examination.[5] The award must be issued within 6 months of the case management conference, although the ICC Court has the ability to extend that time period.[6]

Although the Expedited Procedure Rules would likely reduce the time and cost associated with arbitrating a small claim, the ICC Court’s power to appoint a sole arbitrator has caused some concern, particularly because of the phrasing: “[t]he Court may, notwithstanding any contrary provision of the arbitration agreement, appoint a sole arbitrator.”[7]

The ability of the ICC Court to appoint a sole arbitrator, irrespective of the arbitration agreement, has some wondering if the ICC Court is assuming too much power by taking away party autonomy.[8] Parties that may have agreed to a 3-member arbitration tribunal could find the ICC Court overriding their contractual agreements for the of expediency.

It is worth noting that the wording of the rule makes the overriding of the agreement discretionary on the part of the ICC Court. Over time, we may find that the ICC Court gauges whether to impose its power based on how quickly and effectively the parties can decide on a panel. Overriding the parties’ agreement creates a strange inconsistency in a procedure that is built on party autonomy – on parties’ desire to decide how to resolve disputes on their own terms.

Endnotes:

[1] International Chamber of Commerce Rules of Arbitration, Article 30.

[2] The Express Lane for Claims under US$ 2 Million: The New ICC Expedited Procedure Rules, White Case. (Nov. 7, 2016), https://www.whitecase.com/publications/alert/express-lane-claims-under-us-2-million-new-icc-expedited-procedure-rules.

[3] International Chamber of Commerce Rules of Arbitration, Appendix VI, Article 2.

[4] Id. at Appendix VI, Article 3(3).

[5] Id. at Appendix VI, Article 3(5).

[6] Id. at Appendix VI, Article 4(1).

[7] Id. at Article 2(1).

[8] Lucja Nowak and Nata Ghibradze, The ICC Expedited Procedure Rules – Strengthening the Court’s Powers, Wolters Kluwer. (Dec. 13, 2016), http://kluwerarbitrationblog.com/2016/12/13/reserved-for-13-december-the-icc-expedited-procedure-rules-strengthening-the-courts-powers.