Could the new expedited procedure tempt parties away from the LCIA and other institutions?
The ICC has long been regarded as one of the foremost arbitration venues for the resolution of high value, complex international disputes, but its reputation for being expensive and overly bureaucratic has led to the perception that other arbitral bodies, such as the LCIA and HKIAC, are more appropriate for the resolution of lower value disputes. This is so notwithstanding that in 2015, the LCIA published details suggesting that, for claims where the value in dispute was less than US $1m, the costs of an LCIA arbitration were comparable with those of an ICC arbitration1.
In an effort to combat this perception, the ICC has announced amended rules which came into force on 1 March 2017 including an Expedited Procedure, which will apply automatically to all claims where the amount in dispute does not exceed US $2m, unless the parties have specifically opted out of the procedure.
The Expedited Procedure, contained in Article 30 and Appendix VI of the amended Rules provides that:
The length of time it can often take to obtain an award has long been a source of frustration for parties and the requirement for Tribunals to commit to a schedule for delivery of their final award is likely to be extremely appealing. There is no similar requirement within the current LCIA Rules and information published by the LCIA in 2015 suggested that the median duration of an arbitration conducted by a sole arbitrator under LCIA Rules was 15 months. Consequently, parties who have traditionally incorporated LCIA Rules into their contracts may now consider the benefits of adopting the ICC Rules instead.
For parties whose contracts already provide for ICC arbitration, consideration should be given as to whether they should expressly opt out of the new Expedited Procedure, which will otherwise apply to all claims of $2m or less. Opting out might be appropriate where, for example, the monetary value of a contractual claim may be small but the wider implications for the parties could be significant.