By Charles Rae
In a revised practice note, the ICC Court of Arbitration has provided guidance on the procedure for determining applications for summary dismissal of unmeritorious claims and defences in arbitrations conducted under the ICC Rules. The revisions are important because the ICC Rules do not otherwise contain a process for dismissing claims or defences on a summary basis. The guidance is the latest signal from institutions that tribunals should consider summary procedures as a means of ensuring that disputes are resolved in an efficient and cost effective manner.
Revised Practice Note: Summary
The practice note seeks to promote efficiency in the way in which tribunals and parties deal with applications, by:
- Requiring parties to make the application as promptly as possible after the filing of the relevant claims or defences
- Confirming that the tribunal considers the need to ensure time and cost efficiency in determining whether or not to allow an application to proceed
- Directing tribunals to promptly adopt procedural measures to deal with the application after consulting with the parties
- Encouraging tribunals to adopt a streamlined process by allowing the presentation of evidence beyond the defendant’s response to the application only in exceptional circumstances, and considering whether any hearing (if required) can be conducted by video conference or telephone
- Directing tribunals to decide the application as promptly as possible and provide concise reasons for its decision in either an award or order
- Providing a one-week deadline for the ICC Court to scrutinise any award or order a tribunal makes
ICC the latest to promote the use of Summary Procedures
The introduction of the revised practice note reflects a wider trend amongst institutions to make summary procedures a more established part of the case management powers available to tribunals in dealing with unmeritorious claims and defences.
Parties should be aware that not all institutional rules expressly provide a means for parties to apply for the summary disposition of claims or defences without a full hearing on the merits, although such procedures have long been considered to fall within tribunals’ wide procedural powers. Prior to 2016, none of the major institutional rules — with the exception of the ICSID Rules — expressly dealt with arbitral tribunals’ power to adopt procedures for the summary dismissal of unmeritorious claims or defences.
This has now changed with the Singapore International Arbitration Centre (SIAC) and the Stockholm Chamber of Commerce (SCC) leading the way:
- Since 1 August 2016, the SIAC Rules have included express provision for the early dismissal of claims and defences which are manifestly without merit
- Since 1 January 2017, the revised SCC Rules have specifically provided a summary procedure for the determination of issues of law or fact relevant to jurisdiction, admissibility, or the merits of case
Neither set of rules contains a prescribed form of summary procedure, giving tribunals the flexibility to adopt the best form for the particular circumstances of the case at hand. However, these rules emphasise that tribunals must hear and determine applications expeditiously. The SIAC Rules allow the tribunal 60 days from the date of filing the application to produce an award or order. SCC Rules require the tribunal to make an order or award in an efficient and expeditious manner having regard to the circumstances of the case.
Other institutions have so far refrained from incorporating summary procedures into their rules, instead opting to reassert tribunals’ responsibility to exercise their wide case management powers in a way that promotes efficiency. For example, Article 14 of the LCIA Rules imposes a duty on the tribunal to adopt procedures suitable to the circumstances of the arbitration, thereby avoiding unnecessary delay and expense to provide a fair, efficient, and expeditious means for the final resolution of the parties’ dispute. A similar requirement exists in Article 22 of the ICC Rules, which requires the parties and the tribunal to make every effort to conduct the arbitration in an expeditious and cost-effective manner.
The ICC’s decision to promote summary procedures in its revised practice note is the latest response by arbitral institutions to user concerns about the cost and efficiency of arbitration. The widespread availability of summary judgment as a mechanism for national courts to dispose of frivolous claims without a full merits hearing has traditionally been cited as a key point of differentiation between arbitration and litigation. By expressly confirming the power of tribunals to deal with such claims summarily in arbitration conducted under the ICC Rules, the ICC Court has taken steps to address this perceived shortcoming and make arbitration more attractive.
The revised practice note should provide greater certainty for parties to ICC arbitration about the available options for efficiently dealing with frivolous claims. The note should also reassure tribunals of the case management tools at their disposal when faced with cases suitable for early dismissal, and the need to exercise their powers in a way that ensures the arbitration is conducted expeditiously. Finally, the explicit confirmation that summary dismissal falls within the broad powers conferred on the tribunal under Article 22 will likely make successfully challenging procedural orders and awards rendered under ICC Rules using a summary procedure more difficult.