\u00a9 Sherby & Co., Advs.<\/p>\n
The International Chamber of Commerce recently announced the adoption of a set of \u201cexpedited rules.\u201d\u00a0 In a subsequent post, we will examine the extent to which these rule changes are likely to affect the decision by Israeli companies to select ICC arbitration, and we will do so utilizing some empirical data concerning the views of Israeli in-house counsel.<\/p>\n
But in this post, we start with the question of whether one of the rule changes indicates that the ICC has, essentially, followed the lead<\/em> of Israel\u2019s oldest arbitral institute, the Israeli Institute of Commercial Arbitration (http:\/\/www.borerut.com\/<\/a>).<\/p>\n Specifically, one of the ICC\u2019s rule changes attempts to solve the same problem that the IICA attempted to solve years ago \u2013 namely, whether an arbitral institute should, in connection with relatively small<\/em> cases, be bound to appoint three arbitrators solely because the arbitration agreement calls for the appointment of three arbitrators.<\/p>\n The ICC has not yet published on its website the full set of the expedited rules (that will probably change soon), but the ICC has announced that those rules will give the institution the discretion to appoint a sole<\/em><\/strong> arbitrator in connection with a contractual dispute not greater than $2 million even if<\/em> the parties had specified in their contract that any<\/em> dispute would be arbitrated by more than one<\/em> arbitrator.<\/p>\n Almost immediately after the announcement, some international arbitration practitioners questioned whether the ICC has gone too far \u2013 because the rule change overrides<\/u><\/em> contractual stipulations<\/em><\/u> for arbitration before multiple arbitrators.\u00a0 Invoking the principle that arbitration is a creature of contract<\/em>, some observers have expressed the concern that, in an effort to promote \u201cspeed and efficiency,\u201d the ICC has ridden roughshod over the fundamental principle of freedom of contract.<\/p>\n Commenting in Global Arbitration Review<\/em>, Jose Maria de la Jara and Nicolas Rosero recently wrote:<\/p>\n Some practitioners will no doubt argue that the parties\u2019 consent is not breached because they have chosen to arbitrate the dispute under the ICC [\u2018s then existing] rules, which now include the regulation regarding the expedited procedure. \u00a0Thus, the parties have implicitly given consent to resigning their right to a three-person panel.<\/p>\n But . . . implicit consent does not accurately represent the intention of the parties.\u00a0 Companies simply do not sign contracts with a hypothetical low-value dispute in mind that would force them to go to an expedited procedure decided by a sole arbitrator.\u00a0 Hence, caution should be exercised on overriding an explicit and crystal-clear agreement expressed in the arbitration clause with a presumed and hypothetical consent.\u00a0 After all, arbitration is a matter of consent, not coercion.<\/p>\n<\/blockquote>\n Time will tell whether other observers will join the chorus criticizing the \u201cimplied consent\u201d basis for the rule change.<\/p>\n But regardless of how that specific part of the debate plays out, arbitral institutions worldwide still need to grapple with the issue of the efficiency of multiple arbitrators in relatively small cases.<\/p>\n The Israeli Institute of Commercial Arbitration<\/strong> addressed this issue as far back as 2007<\/u>, when the IICA adopted its International Rules.<\/p>\n\n