Four years ago, the International Chamber of Commerce launched the “Expedited Procedure Provisions” (EPP).
Since then, an impressive total of 261 cases have been handled under this framework, which offers numerous procedural advantages.
Our partner Detlev Kühner explains the reasons behind the success of EPPs (in English):
Before providing feedback on how the EPP works in practice, the statistics from the past four years will be presented and analyzed.
i. Statistical overview:
Between March 1, 2017—the date the EPP entered into force—and December 31, 2020, the Rules applied to all cases[1] filed pursuant to arbitration agreements in contracts entered into on or after March 1, 2017, where the total amount in dispute did not exceed USD 2 million (Article 30(2) of the ICC Rules of Arbitration). For all arbitration agreements in contracts entered into on or after January 1, 2021, the threshold of USD 2 million has since been increased to USD 3 million.
However, the EPPs are also available for cases where contracts were entered into before they took effect or exceed the above monetary threshold, provided that the parties expressly opt in.[2]
As an indicator of the EPP’s suitability and success, the number of opt-in requests has increased significantly over the years.
Thus, in 2017, 46 requests were filed, of which 12 were agreed to by the opposing party and were subsequently administered under the EPP. In 2018, the number of opt-in requests more than doubled to 96, of which 22 were agreed to by the opposing party.[3] In 2019, the number of agreed cases remained stable at 21, while the number of opt-in requests (50) was roughly the same as in 2017.
As of 2019, an additional category of cases must be added to the number of new cases that have so far been obtained exclusively through the parties’ opt-in requests. These are the cases in which the EPP applies by direct operation pursuant to the automatic opt-in mechanism. Thus, 65 new cases must be added in 2019, in which the arbitration agreement was entered into after March 1, 2017.
In 2020, the number of cases in which the arbitration agreement was entered into after March 1, 2017, increased significantly from 65 to 113 new cases. The number of opt-in requests also increased significantly from 50 to 149, of which 28 were accepted by the other party.
To date, 261 cases have been or are being conducted under the EPP. The reasons for this success cannot be explained solely by the more or less automatic application of the EPP in many instances. Rather, the content of the EPP also meets the parties’ needs and expectations in terms of efficiency and costs, with two-thirds of the 115 final awards rendered under the EPP issued on or around the six-month deadline.[4] There is little doubt that this will increase the number of opt-in requests by parties in the future.[5]
ii. Feedback on a recent practical experience under the Rules:
In a recent case conducted under the EPP, the proceedings were effectively streamlined, and a draft final award was prepared in less than 5 months after the sole arbitrator received the case file. Furthermore, the final award was approved and notified to the parties within the six-month period provided for that purpose. In addition, the arbitral tribunal was constituted in less than a month, as the parties had agreed on the sole arbitrator. Overall, the entire proceedings therefore lasted no longer than 7 months.
What was unique about that case was that preparing for the Case Management Conference in writing proved to be very efficient, so that both parties agreed that holding a Case Management Conference was no longer necessary. Thus, the procedural aspects—and, in particular, the procedural timeline—could be agreed upon with the parties in writing within a very short period of time.[6] By contrast, both parties subsequently benefited from the opportunity to submit two rounds of written briefs, including expert statements.[7]
It was also agreed that no hearing was necessary and that the case could be decided solely on the basis of the documents submitted by the parties. Since both parties had a civil law background, it was also agreed that no documents would be produced. [8]
It must be clear that, in order to meet the six-month deadline, it is virtually impossible to conduct the arbitration while including all the typical elements of a “normal” arbitration under the ICC Arbitration Rules—that is, witnesses, experts, an evidentiary hearing, document production, and two or three rounds of submissions.[9] At least some procedural concessions must therefore necessarily be made by each party. Consequently, the role of the arbitral tribunal as a moderator promoting appropriate procedural streamlining is key in this context.
[1] Unless the parties have agreed to opt out of the Rules or the Court has determined that it would be inappropriate to apply the Rules to a specific case, pursuant to Article 30(3)(b) and (c) of the ICC Arbitration Rules.
[2] That is, arbitration agreements entered into prior to March 1, 2017, and cases involving an amount in dispute exceeding EUR 2 million or, since January 1, 2021, EUR 3 million.
[3] All figures were taken from the official ICC statistics published annually in the ICC Bulletin.
[4] In most cases, the delay was due to justified circumstances, and in the eight cases in which the delay could not be sufficiently justified, the delay resulted in a reduction in the arbitral tribunal’s fees. This time period must be compared to the average duration of roughly 2 years for ICC arbitrations conducted under the “normal” ICC Arbitration Rules.
[5] Should there be a trend among the parties to submit cases to the EPP involving amounts in dispute that exceed the current maximum of EUR 3 million, the ICC may wish to take that into account when deciding on a potential increase in the current maximum amount in the future.
[6] Obviously, this approach is only feasible in situations where both parties are fully committed to ensuring that the arbitration proceeds as efficiently as possible. In the case in question, the strong encouragement provided to the parties under the EPP to act efficiently proved effective.
[7] However, a page limit was agreed upon.
[8] Art. 3 EPP (Appendix VI of the ICC Arbitration Rules)
[9] While Article 3 of the EPP encourages procedural streamlining, it is, at least in theory, possible to conduct EPP proceedings almost like a “normal” arbitration.