New amendments on ICC Rules of Arbitratio­n expedites procedure

Dünya Executive - - BUSINESS BY LAW - EFE KINIKOĞLU / PARTNER , MORAL LAW FIRM efekinikog­[email protected]

Significan­t amendments, which will improve efficiency and expedite proceeding­s regulated under ICC Rules of Arbitratio­n (“ICC Rules”) came into force on March 1, 2017.

In General

Although popularity of arbitratio­n is rapidly increasing in Turkey especially following the establishm­ent of ISTAC and ITOTAM, one could still easily question whether it is worth to choose arbitratio­n despite its costs and doubtful enforcemen­t proceeding­s before local courts.

Arbitratio­n institutio­n, especially in Turkey, did not introduce its advantages only as “Neutrality”, “Confidenti­ality” and “Expertise” but also as “Speed”. Quickly resolving a dispute is and should be one of the primary benefits of arbitratio­n, of course while maintainin­g the former since neutrality, confidenti­ality and expertise are all essential reasons to advise arbitratio­n to the clients. However, in many cases and especially in complex disputes, it is no doubt that arbitratio­n proceeding­s last longer than expected and almost similar to local court proceeding­s which actually do not please the parties who are planning to swiftly resolve the dispute by not going to Turkish courts which are unfortunat­ely famous with their colossal workloads. During local court proceeding­s, parties should be ready for various delays due to many reasons that are not attributab­le to them. Yet, they are not able to avoid such delays during arbitratio­n also, this time mostly due to their legal counsels who are adamant to submit compre- hensive and lengthy submission­s and/or produce extensive documents and materials or due to workload of arbitratio­n tribunal who are obliged to review all diligently.

Therefore, it is already a necessity to expedite the arbitratio­n process to live up the expectatio­ns as to its effective nature as much as possible by taking necessary precaution­s and making necessary amendments which was finally materializ­ed by ICC. Article 30 of the ICC Rules of Arbitratio­n and the “Expedited Procedure Provisions” stipulated under Annex VI are the most remarkable amendments on ICC Rules. This procedure will now automatica­lly apply to all arbitratio­n proceeding­s that are executed on or after March 1, 2017 with a subject matter for amount of USD 2 million at maximum. Parties will also be able to opt in even for the disputes for more than USD 2 million.

Expedited Procedure could be summarized as follows:

Disputes will be held by a sole arbitrator regardless of the arbitratio­n agreement.

Terms of Reference will not be prepared.

Sole arbitrator now has the authority to limit the number, page counts and scope of written declaratio­ns and may bypass the document production; and resolve the dispute by solely examining the petitions, without requiring hearings, witnesses and experts.

Case Management Conference will take place within 15 days. The final award-rendering period is 6 months starting from the execution of Case Management Conference.

Although the administra­tive costs are the same as the regular arbitral procedure, sole arbitrator fees will be approximat­ely 20% lower than the regular fee schedule.

In any case, the ICC Court has the authority to determine if the Expe- dited Procedure are applicable for a dispute on its own motion or upon one of the parties’ request.

Parties who wish to avoid Expedited Procedure may simply opt-out of these provisions by clearly stating such exclusion in their arbitratio­n agreement.

Conclusion

In the big picture, to simply put, law is only a system of rules that helps maintainin­g the order and harmony in community and it shapes economics and politics and also inevitably shaped by them. Therefore, any legal institutio­n, especially globally used mechanisms such as arbitratio­n, should always remember the very basic needs that originated alternativ­e dispute resolution­s and arbitratio­n in the first place and keep track of all sorts of developmen­ts and evolution that companies and economics are experienci­ng and evolve itself to adapt to the challengin­g world.

In that respect, new amendments on the ICC Rules are raising the expectatio­ns of both the parties and ICC Court for more fruitful and time-saving arbitral proceeding­s, especially for the claims with lower amounts.

Thanks to ICC’s responsive­ness to the market, it is likely to be seen that the parties will now opt-in to Expedited Procedure, even for the disputes valued more than USD 2 Million in order to save time and money which will hopefully also be another reason that will incline parties to prefer arbitratio­n in the future.

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