Monday, 9 October 2023

The ICC Commission on Arbitration and ADR publishes report and guide to the promotion of dispute prevention and resolution

By Tajwinder Atwal, Trainee, Fenwick Elliott

2023 marked 100 years of the ICC International Court of Arbitration, the world’s leading arbitral institution. In light of this, the ICC Commission on Arbitration and ADR (the “Commission”) published a Guide on Effective Conflict Management (the “Guide”)1 and a Report on Facilitating Settlement to International Arbitration (the “Report”).2 Both the Guide and the Report discuss different dispute resolution techniques and how to facilitate a settlement of disputes in international arbitration.

Every year, the Commission brings experts and practitioners in the field of arbitration and ADR together during plenary sessions to discuss proposed rules and the Commission Reports. This currently includes over 1,300 members from some 100 countries. The products created by the Commission are all available online at www.iccwbo.org [1] and on the online ICC Dispute Resolution Library.3

The president of the ICC International Court of Arbitration, Claudia Salomon commented on the latest publications and stated that these deliver one of ten pledges set out in the ICC Centenary Declaration on Dispute Resolution,4 that was announced early this year. Pledge 3 refers to “Thought leadership” meaning “to drive thought leadership in dispute prevention and resolution through innovative services, best practices and standards that meet the evolving needs of an ever-wider range of businesses and markets, to enable the requisite legal frameworks, including the enforceability of arbitral awards.”

The Guide

There are many ADR techniques to promote settlement of disputes. One example is early neutral evaluation whereby parties engage the services of an ADR “neutral”.

A neutral providing service under the ICC ADR Services may be an expert or a dispute board appointed to provide a non-binding preliminary evaluation of the parties’ dispute. Neutrals can help parties to gain an early insight into the strength and weaknesses of their positions, which can inform parties on the best approach to a potential settlement. The Guide explains how to efficiently use ADR techniques to avoid escalation and potentially resolve disputes, which can reduce cost in the long run.

The Guide goes on to explain the available ICC Dispute Resolution Services, including the ICC Rules of Arbitration, the ICC Mediation Rules, Expert Rules and Dispute Board Rules and provides examples of how they can be used as standalone or combined services.

The Report

The Report focuses on proposals to allow parties to settle disputes even once arbitration proceedings have begun. As well as having obvious cost benefits, settling the claim can help to preserve business relationships.

It is usefully split into three main sections:

Case Management Techniques ("Section 1")
Mediation Windows and Protocols (“Section 2”)
Preliminary View and Settlement Conferences (“Section 3”)

Taking each section by turn, Section 1 discusses the first case management conference (“CMC”), which looks at the first procedural order and procedural timetable to ensure they are both purpose built. The arbitral tribunal should also ensure that the CMC incudes steps that provide for effective management of the overall proceedings as well as facilitating a settlement.

It is important to remember that these case management techniques do not stop at the first CMC. The arbitral tribunal may schedule further procedural meetings, which will give everyone the opportunity to review, based on the submissions to date, how their initial positions may have changed. The arbitral tribunal will also be able to provide guidance on the issues to be addressed in further submissions or at the hearing.

Section 2 looks at the ICC Mediation Guidance Note, specifically paragraph 29 which describes the utility of mediation windows:

“29. Where mediation takes place in the course of arbitration proceedings, it may be appropriate for the arbitration to be stayed to allow time for conducting the mediation (such a stay or pause in the proceedings is sometimes referred to as a mediation window). This enables the parties to focus on the mediation without being distracted by the need to take steps in the arbitration and incurring the costs of those steps when a settlement may be imminent. In other cases, the parties may prefer to conduct the mediation without requiring a stay or pause in the arbitral proceedings.

30. The suggestion that mediation be used during the arbitration proceedings may be made by one of the parties. Whether or not it is helpful to build a mediation window into the timetable for the arbitration proceedings — and, if so, when that window should occur — is also a topic which may be discussed between the parties and the arbitral tribunal at the first and subsequent case management conferences provided for in Article 24 of the ICC Arbitration Rules”.

Section 2 in the Report then explains how the idea of a mediation window should be raised, the timing/duration of the mediation window and whether the arbitration should be paused whilst the mediation takes place.

Section 3 of the Report discusses the possibility of the arbitral tribunal giving parties its non-binding and preliminary assessment on the issues in dispute in the arbitration. If the arbitral tribunal were to adopt this approach, they could give preliminary views on the whole case, or on specific issues. The advantage to the parties would be to help them understand the strengths and weaknesses of their respective cases and, perhaps most importantly, the parties will understand how the arbitral tribunal may ultimately decide its views on the merits. To seek this preliminary view, the arbitral tribunal understandably requires the express agreement of the parties.

The difference between the preliminary assessment and an early neutral evaluation given by an independent third party is that the former has the additional value that the views come from the arbitral tribunal that will decide the case.

Conclusion

Both the Guide and Report are driven by the needs of users, and the Commission is hopeful that this will target “a wide range of businesses, from SMEs to multinational corporations, as well as states, external counsel using ICC dispute resolution services, alongside arbitrators, mediators and other ADR service providers”.5

The credit for these publications goes to the ICC Task Force on ADR and Arbitration, created by the ICC Commission on Arbitration and ADR. Christopher Newmark, Co-Chair of the Task Force, states “Arbitrators facilitating settlement is a common practice for some, but brand new territory for most. Increased interest in this developing role for arbitrators means that all practitioners should know how it can be done effectively and the pitfalls to avoid – reading the Report on Settlement Facilitation is a good place to start”.6

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