Unfortunately, we frequently come across commercial contracts containing arbitration clauses under which disputes have arisen but the amounts in issue do not justify the potential costs of arbitration. Parties are consequently denied a dispute resolute mechanism, since the existence of a clause obliging parties to resolve their dispute by way of arbitration actually precludes disputes of a smaller value ever being resolved by independent arbitrators.
The International Court of Arbitration of the International Chamber of Commerce (ICC) announced amendments to the ICC Rules of Arbitration late last year. These amendments came into force on 1 March 2017 and introduced, amongst others, a new set of rules which provide for a more efficient arbitration procedure for disputes under US$2 million (Expedited Rules). The aim of such procedure is to expedite and simplify smaller value claims, which will in turn reduce the potential costs incurred.
The Expedited Rules apply if:
It should be noted that if the arbitration agreement was concluded before 1 March 2017, it is still possible for parties to “opt in” and such agreements can be concluded at any time. Conversely, the ICC can, upon the request of a party before the constitution of the arbitral tribunal or on its own motion, determine that it is inappropriate in the circumstances to apply the Expedited Rules.
The Expedited Rules simplified the arbitral process by providing inter alia that:
Under the Expedited Rules the final award is rendered within six months from the case management conference.
In short, the Expedited Rules provide a welcome arbitral procedure for lower value disputes which will provide greater access to justice in a more cost-effective manner.
Frances Jenkins, Associate, Fladgate LLP (email@example.com)