HOW ICC OPERATES –

AND SELECTS AND APPOINTS

ARBITRATORS

A paper presented to the Society of

Construction Law at a meeting
in Edinburgh on 26th April 2012

John Rushton

July 2012

D136

www.scl.org.uk
 HOW THE ICC OPERATES –
AND SELECTS AND APPOINTS
ARBITRATORS

John Rushton

The International Chamber of Commerce (ICC) is a business group. Its

dispute resolution arm administers arbitrations conducted in accordance with
its own Rules. For the purpose of this paper I am referring to the ICC
Arbitration Rules which came into force on 1st January 2012 for arbitrations
commenced on or after that date, although many arbitrations are still being
conducted under the previous version, which had been in force since 1998.

Organisation
For the purpose of administering arbitrations, the ICC is organised as follows:

(i) a Court of Arbitration (‘the Court’), which sits in Paris. Its President
is John Beechey, a former partner of Clifford Chance LLP in
London. It has 15 Vice-Presidents appointed by the President and
representatives from 88 countries. The Court is not a court as such –
see below. Those on the Court who represent the United Kingdom
are Alan Redfern, one of the Vice-Presidents, and Dr Julian Lew QC,
with Andrew Foyle being the nominated alternate for the latter;
(ii) a Secretariat under the direction of Jason Fry (the Secretary General)
and Jose Ricardo Feris (the Deputy Secretary General). It has eight
teams of Counsel, who are responsible for dealing with ICC cases on
a day-to-day basis. The UK team of Counsel is headed by Alison
Pearsall. The Secretariat assists the Court in its work;
and
(iii) National Committees and Groups, which are generally drawn from
practitioners in individual countries. Their main role is to propose
arbitrators, when requested so to do by the Court or Secretariat. I
represent the UK National Committee for this purpose.

Article 3 of Appendix II of the Rules makes clear that members of the Court
are independent of National Committees and Groups. The National
Committees and Groups represent one of four distinguishing features of ICC
arbitration. I shall touch on the other three later.

The headquarters of ICC is in Paris. ICC will be moving to new premises in

the French capital later in 2012. It opened an office in Hong Kong in 2008,
which is run by Cheng-Yee Khong. It also has a presence in Singapore. ICC
plans to open another office (in New York) in a few months’ time.

1
In addition, ICC has set up in Paris the International Centre for ADR, run by
Hannah Tuempl. Its role is to organise mediations, dispute resolution boards
and pre-arbitral referee procedures (which might be likened to adjudication),
besides identifying suitable experts for cases, whether at the request of the
parties or for the benefit of an arbitral tribunal.

The Court
Article 1(2) of the Rules sets out the role of the Court:
‘The Court does not itself resolve disputes. It administers the resolution
of disputes in accordance with the Rules of Arbitration of the ICC (the
‘Rules’). The Court is the only body authorised to administer
arbitrations under the Rules. It draws up its own internal rules, which
are set forth in Appendix II.’

In particular, the Court:

(i) appoints arbitrators, unless the Secretary General exercises the
power given to him by Article 13.2 (discussed under ‘Secretary
General’ below);
(ii) decides upon the appointment, confirmation, challenge or
replacement of arbitrators. Article 11(4) makes clear that its
decisions ‘shall be final’ and the reasons for such decisions ‘shall
not be communicated’. When the Rules were being drawn up, there
was considerable debate about whether reasons should indeed be
given for the Court’s decisions, with some arguing that their
provision would encourage transparency and others claiming that
there was no demand for them from the end user (as opposed to his
lawyer) and expressing concern that an unsuccessful challenge may
influence the proceedings and give rise to an unwanted precedent
being set;
(iii) replaces an arbitrator in accordance with Article 15, upon death,
upon acceptance by the Court of his/her resignation, upon
acceptance of a challenge, or at the request of the parties. The
Court may also remove an arbitrator if it decides that s/he is
prevented de jure or de facto from fulfilling the arbitrator’s
functions; or that s/he is not fulfilling those functions in accordance
with the Rules or within the prescribed time limits;
(iv) fixes advances on costs;
(v) decides the place of arbitration, pursuant to Article 18(1), unless the
parties have agreed it;
and
(vi) consolidates proceedings. Article 10 states that two or more
arbitrations pending under the Rules may be consolidated by the
Court into the arbitration which has been commenced first, upon the
application of a party where:
(a) all the parties have so agreed;

2
 (b) all the claims in the arbitrations are made under the same
arbitration agreement; or
(c) where the claims in the arbitrations are made under more than
one arbitration agreement and the arbitrations are between the
same parties, the dispute arises in respect of the same legal
relationship and the Court finds the arbitration agreements to be
compatible. In exercising its discretion, the Court may take
into account any circumstances which it considers to be
relevant, such as whether one or more of the arbitrators in one
case have been confirmed or appointed and whether they are
the same as in the other arbitration(s).

In the absence of agreement, there is no express provision, as some advocated,

for consolidation of arbitrations involving different parties but relating to the
same project. The Court’s decision on whether to allow consolidation is seen
to be administrative and not subject to review.

Apart from the role played by National Committees and Groups, there are
three other particular features of ICC arbitration, and the Court plays a pivotal
role in respect of each:

1 Terms of Reference
Article 23 of the Rules requires Terms of Reference to be drawn up by the
arbitral tribunal, as soon as it receives the file from the Secretariat, on the basis
of the documents in such file or in the presence of the parties. Terms of
Reference set out inter alia the contact details of the parties and the arbitral
tribunal, the place of the arbitration, a summary of the parties’ respective
claims, the relief sought and (unless the tribunal considers inappropriate) a list
of the issues to be determined.

Terms of Reference in each case are to be signed by the parties and the arbitral
tribunal and submitted to the Court for approval. The Rules envisage that all
this will happen within two months of the date on which the file has been
submitted by the Secretariat to the tribunal. The Court can extend this time
limit on receipt of a reasoned request from the tribunal, or on its initiative if it
decides that it is necessary to do so. The Court also has power to approve the
Terms of Reference, if a party refuses to participate in drawing them up or to
sign them.

2 Scrutiny of the draft award

Article 33 of the Rules states:
‘Before signing any award, the tribunal shall submit it in draft form to
the Court. The Court may lay down modifications as to the form of the
award and, without affecting the arbitral tribunal’s liberty of decision,
may also draw its attention to points of substance. No award shall be
rendered by the arbitral tribunal until has been approved by the Court as
to its form.’

3
The scrutiny process is a valuable way of maximising the likelihood of the
award being enforceable.

3 Determination of the arbitral tribunal’s fees

A particular feature of ICC arbitration is that it is the Court, not the arbitral
tribunal, which determines the remuneration of the latter. It is worth noting in
particular Article 2.2 of Appendix III of the Rules:
‘In setting the arbitrator’s fees, the Court shall take into consideration
the diligence and efficiency of the arbitrator, the time spent, the rapidity
of the proceedings, the complexity of the dispute and the timeliness of
the submission of the draft award.’

The Secretary General

There are four particular references to the role of the Secretary General in the
Rules which are noteworthy:
(i) under the previous Rules, when a party raised an objection
concerning the existence, validity or scope of an arbitration clause,
it fell to the Court to make a prima facie determination as to
whether an arbitration agreement existed. However, it was found
that, over a five-year period, only 1-2% of cases involved
challenges in respect of jurisdiction were actually successful.
Under the Rules as now written, it will be for the arbitral tribunal to
decide any such challenge unless the Secretary General decides to
refer it to the Court (Article 6(3)). The Secretary General made it
clear, at the launch of the Rules in September 2011, that the
presumption will be that an arbitral tribunal rather than the Court
will determine jurisdictional issues. This amendment is intended to
speed up the arbitral process, although the court of the country
where the award is sought to be enforced has the final say on
whether the tribunal had jurisdiction to render it;
(ii) he has power in circumstances set out in Article 13(2) to confirm
the appointment of co-arbitrators, sole arbitrators and presidents of
tribunals. Any such confirmation has to be reported to the Court at
its next meeting;
(iii) he may certify copies of awards, if required;
and
(iv) he can request provisional advances on costs from the claimant
pursuant to Article 36(1). Article 36(6) goes on to provide that,
when a request for an advance on costs has not been complied with,
the Secretary General, after consultation with the arbitral tribunal,
may direct it to suspend its work and must set a time limit, which
must not be less than 15 days for the provision of such advance. If
it is not provided, the relevant claim shall be considered as
withdrawn.

4
Appointment of arbitrators
An arbitrator in an ICC case may be appointed in one of three ways:
(i) nomination by the parties (Articles 12(3) and 12(4)), followed by
confirmation by the Court in accordance with Article 13(1), or by
the Secretary General in accordance with Article 13(2);
(ii) via a proposal by a National Committee or Group and appointment
by the Court in accordance with Article 13(1);
or
(iii) by the Court itself, in circumstances described below.

It should be noted first that most appointments are via route (i) above; and
secondly, that the Court has in effect a right of veto over all ICC appointments
(and can reject the proposal of a National Committee or Group).

In the case of route (ii) above, the practice (as far as the UK National
Committee is concerned) is as follows:
(i) the ICC Secretariat sends a letter to me setting out details of the
case and invites a proposal, generally within 10 days. About 70%
of such proposals relate to the appointment of a sole arbitrator, the
balance being for a chairman. Very occasionally, a party fails to
nominate an arbitrator and the UK National Committee is asked to
do so in its stead. The letter may lay down restrictions on any
proposal made (eg regarding the candidate’s ability to speak a
foreign language, knowledge of a foreign law or his/her place of
residence);
(ii) a number of possible candidates are discussed with counsel in
charge of the case (to see what other pending matters a particular
candidate has on, whether his/her past performance is up to scratch
etc) and to find out whether counsel would like any particular
person to be considered. Article 13(1) requires the Court, in
confirming/appointing arbitrators, to consider the prospective
arbitrator’s ‘nationality, residence, and other relationships with the
countries of which the parties or the other arbitrators are nationals
and the prospective party’s availability and ability to conduct the
arbitration in accordance with the [ICC] Rules’. In putting forward
a candidate, I have obviously to bear in mind what Article 13(1)
requires of the Court. I am not obliged to discuss the case with
counsel, but in the interests of finding the most suitable candidate
for the case I have found it helpful to do so.
(iii) after taking due account of any comments made by counsel (and
any other party whom I think should be consulted), I provide a
candidate with the names of the parties (and others who, though
not parties to the arbitration, may be related to the dispute) to see
whether there are problems with conflicts and/or availability. If
there is none, I then let the candidate have copy of the original
letter from ICC (with any confidential/case-sensitive material

5
 removed);
(iv) if the candidate is willing and able to proceed, s/he completes the
paperwork and returns it to ICC in Paris or Hong Kong (as the case
may be). The paperwork requires the candidate to disclose the
number of currently pending arbitrations with which s/he is
involved and to confirm his/her understanding ‘that it is important
to complete the arbitration as promptly as reasonably practicable
and that the ICC Court will consider the duration and conduct of
the proceedings when fixing [his/her] fees’. It also requires the
candidate to disclose whether there is any past or present
relationship, direct or indirect and of any kind, between him/her
and any of the parties, their related entities or their lawyers and
other representative, with any doubt being resolved in favour of
disclosure;
(v) a formal proposal is made to the Secretariat;
then
(vi) the Court either makes the appointment or rejects the proposal. In
the latter case, the UK National Committee may be asked to make
a further proposal. In such circumstances, the Court now has
power to make a direct appointment – see Article 13(3).

Article 11(2) also requires a prospective arbitrator to sign a declaration of

acceptance, availability, impartiality and independence. In addition, it
requires a candidate to disclose in writing to the Secretariat any facts or
circumstances which might be of such a nature as to call into question the
arbitrator’s independence in the eyes of the parties, as well as any
circumstances which could give rise to reasonable doubts as to the arbitrator’s
impartiality. The Article provides for such information to be provided to the
parties and for the Secretariat to fix a time limit for any comments from them.

There was debate about whether it was strictly necessary to require a candidate
to declare his or her impartiality; but it was noted that other institutions such
as the LCIA imposed such a requirement. Nonetheless, it could be argued that
an arbitrator should also sign declarations as to his or her competence, honesty
and efficiency as well. At the risk of making a uniquely English point, the UK
National Committee would not put forward as a candidate someone who
shared Chambers with one or both of the parties’ counsel.

Until 2011, a National Committee or Group could only propose as an

arbitrator a national of its country, wherever that candidate lived. By way of
example, the UK could only put forward the names of a UK national living in
Singapore but not someone of Singaporean nationality living in the UK.
However, it is now open to a National Committee or Group to put forward a
candidate who is based in the country in which the National Committee or
Group operates. That means that the UK National Committee may nominate
one of the many (and distinguished) non-UK arbitrator practitioners,
regardless of his/her nationality. The effect of this change of policy is actually
to make it much more difficult for someone in the UK to be put forward as an
arbitrator, since it expands the number of eligible candidates considerably.

6
Traditionally the UK National Committee has been responsible for proposing
arbitrators in one-third of arbitrations involving UK nationals. In the thirty
three months since I have been responsible for making proposals on behalf of
the UK National Committee, 60-odd different arbitrators have been nominated
for over 130 cases. In the main they have related to claims for breach of
commercial agreements, shareholder and IT disputes and applications for
additional time and money under construction contracts. The amount in
dispute has ranged from US$45,000 in one case to US$450+ million in
another.

Candidates put forward by the UK National Committee have not come from a
small pool of mature practitioners. Indeed, the opposite has been the case:
(i) ICC actively promotes the policy that, if a case can be dealt with by
someone of less senior years, he /she should be invited to take it on;
and
(ii) twelve of the candidates proposed on behalf of the UK National
Committee in the last two years have been appointed as arbitrator for
the first time. Some have been under 35; and many have been under
50.

It also follows that:

(i) whilst there are openings for would-be arbitrators to secure proposals
by the UK National Committee, the opportunity for building up a
portfolio of cases on the back of such proposals is limited;
and
(ii) an aspiring arbitrator should look to secure party nominations by
impressing those who are likely to be involved in the arbitral process
(such as counsel, solicitors and claims consultants).

Analysing the background of first-time appointees put forward on behalf of

the UK National Committee, it is worth noting that:
(i) nearly all have undertaken advocacy in an ICC case as counsel;
(ii) many have been working in an overseas office of his/her firm;
(iii) a foreign language capability can be useful (in one recent case, the
ICC sought a Portuguese-speaking Chairman as a nominee);
(iv) some have got their chance by participating in ICC activities and
leveraging off their contributions to the workings of the organisation
(eg by being a partner of a firm which has sponsored or organised a
conference, or by participating in one of its working groups);
and
(v) one at least has received a nomination because of his unique expertise
(eg e-trading).

National Committees and Groups will continue to play a role in putting

forward the names of candidates as arbitrators, but the Court now has greater

7
rights than hitherto to make direct appointments. The Court will be able to
make a direct appointment if:
(i) it does not accept a proposal made by a National Committee (or
Group) (Article 13(3)). Previously it had to seek a second candidate
from the same or another National Committee;
or
(ii) a National Committee (or Group) fails to make a proposal requested
within the time limit fixed by the Court (Article 13(3));
or
(iii) pursuant to Article 13(4):
‘The Court may also appoint directly to act as arbitrator any person
whom it regards as suitable where:
(a) one or more of the parties is a state or claims to be a state entity;
or
(b) the Court considers that it would be appropriate to appoint an
arbitrator from a country or territory where there is no National
Committee or Group; or
(c) the President certifies to the Court that circumstances exist
which, in the President’s opinion, make a direct appointment
necessary and appropriate.’

John M Rushton is the Arbitration and ADR Consultant, ICC United

Kingdom.

© J M Rushton and Society of Construction Law 2012

The views expressed by the author in this paper are his alone, and do not necessarily
represent the views of the Society of Construction Law or the editors. Neither the
author, the Society, nor the editors can accept any liability in respect of any use to
which this paper or any information or views expressed in it may be put, whether
arising through negligence or otherwise.

8
 ‘The object of the Society
is to promote the study and understanding of
construction law amongst all those involved
in the construction industry’

MEMBERSHIP/ADMINISTRATION ENQUIRIES
Jill Ward
The Cottage, Bullfurlong Lane
Burbage, Leics LE10 2HQ
tel: 07730 474074
e-mail: admin@scl.org.uk
website: www.scl.org.uk