Article written by counsel Alexandra Munoz, published in Les Cahiers de l'Arbitrage 2014/2 (The Paris Journal of International Arbitration) of 1 June 2014, and reproduced with kind permission from Lextenso.
Le nouveau Règlement de Médiation de la CCI remplace depuis le 1er janvier 2014 le Règlement ADR de 2001. Ce nouveau Règlement intègre les pratiques développées par la CCI dans l’application du Règlement ADR de 2001 et renforce les pouvoirs du Centre International pour les ADR de la CCI dans la gestion des procédures de règlement amiable des différends. Malgré le changement de nom, le Règlement de Médiation de la CCI conserve une grande flexibilité dans le type de procédures de règlement amiable des différends pouvant être mises en œuvre par les parties.
The new ICC Mediation Rules replace, since the 1 January 2014, the 2001 ADR Rules. This new text integrates the practices developed by the ICC in the application of the 2001 ADR Rules and reinforces the powers of the ICC International Centre for ADR in its administration of procedures aimed at an amicable settlement of disputes. Despite the change of name, the ICC Mediation Rules maintain a large flexibility in the type of alternative dispute resolution procedure available to parties.
On 1 January 2014, the new ICC Mediation Rules entered into force, replacing the previous ICC ADR Rules in force since 2001. These new Rules were drafted by the ICC Commission on Arbitration and ADR based on the work of a dedicated taskforce on the revision consisting of practitioners and users (1). The aim of this revision was to facilitate the use of alternative dispute resolution techniques and enhance the effectiveness of the Rules, making the Rules more user-friendly, in particular with the issuing of the Mediation Guidance Note.
There is therefore no revolution. The new Rules codify the practices developed by the ICC in managing ADR proceedings during the last decade (2). They seem to take inspiration from the practice of the International Court of Arbitration, strengthening the ICC’s powers to administer ADR procedures and creating the International Centre for ADR (the “Centre”) as a separate administrative body within the ICC (Art.1.1).
As a result, the new Mediation Rules are immediately applicable. According to Article 10.1, where, prior to the date of the entry into force of the new Rules, the parties have agreed to refer their dispute to ADR under the ICC ADR Rules, they shall be deemed to have referred their dispute under the new ICC Mediation Rules unless any of the parties objects, in which case the 2001 ADR Rules of shall apply.
The changes in the new Mediation Rules
Paradoxically, the most obvious and apparent change - the change of name - is not in reality much of a change. While the ADR Rules of 2001 referred to "ADR" in their title and to a "Neutral", the new Mediation Rules, entitled "Mediation" Rules, and referring to a "Mediator", do not change the principle. In fact, both under the ADR Rules of 2001 (Art. 5.2) and under the new Mediation Rules of 2014 (Art.1.3), Mediation is the default mechanism unless the parties agree otherwise. The Mediation Rules preserve the flexibility of the ADR Rules, which has been much appreciated by users and practitioners. Under the new Mediation Rules, the parties may continue to choose settlement techniques other than mediation to settle their dispute. Therefore, where the new Rules refer to a Mediator, this should be read as a reference to any other type of Neutral depending on the technique chosen by the parties (Art.1.3). The “formal” change in title reflects the fact that mediation was the ADR technique that has been most often used by parties (90%), either by choice or by default, during the last decade under the previous Rules.
Changes enhancing the effectiveness of ADR administration by the ICC
Among these changes, the provisions of the new Mediation Rules dealing with the commencement of proceedings are the most detailed and important. As was already the case under the ADR Rules, proceedings under the Mediation Rules may commence whether there is an agreement between the parties to refer to the Rules or not.
Where there is an agreement to refer a dispute to ADR under the Mediation Rules (or under the ADR Rules after the entry into force of the new Rules), the Request for Mediation (filed jointly or by one of the parties) shall now include any agreement to use a settlement procedure other than mediation or, in the absence of an agreement on the applicable procedure, the party's proposals in this regard.. The Request shall also set out any agreement relating to the time limits for conducting the Mediation, the language(s) of the proceedings, the location for physical meetings or, in the absence of agreement, any proposal in this respect (Art.2.1). As a consequence, these issues will not, as a matter of principle, be dealt with by the Mediator during the first session but will be fixed at the outset through the parties’ agreement. In absence of the parties’ agreement, Article 4 of the new Rules gives the Centre the power to determine the language(s) of the proceedings and the location of physical meetings. The ICC may also, as was the case previously, invite the mediator to determine these issues during the first session (Art.4.1). These new provisions avoid the need for the Mediator to make a decision that might damage the necessary atmosphere of confidence he or she must create with all the parties. In addition, it allows the early determination of some very practical issues, in particular in cases where a limitation mechanism (a time limit in which the parties must settle their dispute) has been provided by the parties. It can also allow the parties to take into account this determination when appointing or confirming the Mediator.
In this respect, the new Rules clarify the date of the commencement of the proceedings which is the date on which the Request is received by the Centre (Art.2.5). In presence of an agreement with a limitation mechanism - usually in case of a multi-tiered dispute resolution clause - the new Rules provide that such time limit shall start running on the date the Centre acknowledges receipt either of the Request or of the filing fee, whichever is later (Art. 2.6). This Article was included to discourage the practice consisting of filing a Request to trigger the running of the time period, without paying the filing fee, and then allowing the relevant time period to expire without actually starting the conciliation or mediation. These tactics were possible as according to the Rules no Request may be processed without the payment of the filing fee (Art.6.1).
Where there is no agreement of the parties to refer to the Rules, the Mediation Rules may still apply. This was already the case under the 2001 Rules (Art. 2(B)). In such case, the party that wishes to propose to refer the dispute to the Mediation Rules must file a Request with the Centre containing the information listed above. Upon receipt of the Request, the Centre will inform the other party and may assist the parties in considering the proposal (Art.3.1). The contribution of the new Rules is to codify the practice of the ADR Secretariat - now the Centre - of taking a more pro-active approach by reaching out the other party and informing it about the procedure pursuant to the Mediation Rules (3). If the parties reach an agreement, the proceedings commence on the date on which the Centre sends a written confirmation to the parties that an agreement has been reached (Art.3.3). Where no agreement is reached within 15 days from the date of receipt of the Request, the proceedings shall not commence. In this respect, the new Rules strengthen the power of the Centre as it may, where reasonable, extend the time limit of 15 days for the parties to reach an agreement (Art.3.4).
The new Mediation Rules also preserve the flexibility of the procedure. As already mentioned, despite the change of name, a wide variety of settlement techniques including mediation may be used by the parties. Accordingly, the party filing a Request for Mediation must indicate the settlement procedure agreed by the parties or, in the absence of agreement, propose a settlement procedure (Art.2.1 and 3.1). In addition, the Rules provide that the parties may agree to modify the provisions of the Rules, subject to the agreement of the Centre. According to Article 1.4, if the Centre considers that the changes are not compliant with the spirit of the Rules, it may decide not to administer the procedure. If such changes intervene after the confirmation of the appointment of the Mediator, they are also subject to the Mediator’s approval. This provision avoids compelling a Mediator or a Neutral to engage in a procedure that he or she has not agreed or with which he or she is not familiar or comfortable. In respect of the manner in which the mediation is to be conducted, the new Rules provide that it shall be discussed between the parties and the Mediator (Art.7.1). The Mediator shall send to the parties a written note explaining how the mediation will be conducted. By referring to the Rules, the parties agree to participate in the proceedings until receipt of such note (Art. 7.2). This flexibility allows the different cultural and legal backgrounds of each party and the Mediator to be taken into account.
With respect to termination of the procedure, the changes are minor. The reasons for terminating the procedure have not evolved and are set out in Article 8 of the Rules. There are essentially the same as the reasons contained in the 2001 ADR Rules. Accordingly, proceedings which have been commenced pursuant to the Rules terminate once the parties have signed a settlement agreement (Art.8.1(a)), upon notification to the Mediator by any of the parties that it has decided to abandon the proceeding (Art.8.1(b)), upon notification in writing by the Mediator to the parties that the mediation has been completed (Art.8.1.(c)), upon notification in writing by the Mediator to the parties that, in his or her opinion, the Mediation will not resolve the dispute (Art.8.1(d)), upon the expiration of the time-limit notified in writing by the Centre to the parties (Art.8.1(e)), upon notification by the Centre to the parties, no later than 7 days after the due date, that any payment pursuant to the Rules has not been made (Art. 8.1(f)) or upon notification by the Centre to the parties of the failure to appoint a Mediator or the impossibility of appointing a Mediator. One of the changes relating to termination is that under the new Rules, the Centre will only send a notice of termination of the proceedings to the parties and not to the Mediator. The other change allows the Centre to terminate the proceedings more rapidly in case of non-payment of the fees as, under the new Rules, the Centre may notify the parties of such termination after a period of 7 days has elapsed from the due date whereas the 2001 ADR Rules provided for a period of 15 days. Although the Centre has no incentive to terminate the proceedings hastily, these provisions may be useful when it became obvious to the Centre that non-payment of the fees has become a tactic for preventing the progress of the Mediation.
Finally, the new Rules contain general provisions improving the effectiveness of the Mediation. For instance, while the new Rules still preserve the confidentiality of the proceedings and the information disclosed therein, they also provide that the fact that the proceedings are taking place or have taken place, is not confidential (Art.9.1 (a)). This provision facilitates the management of multi-tiered dispute resolution clauses. In the same vein, the new Rules expressly indicate that, unless otherwise agreed by the parties in writing or unless prohibited by the applicable law, the commencement of mediation pursuant to the Rules does not prevent the parties from initiating or continuing any judicial, arbitral or similar proceedings in respect of the dispute (Art.10.2).
The provisions strengthening the ICC's powers to administer the procedure
Most of these provisions relate to the selection of the Mediator. Under the new Mediation Rules, the joint nomination of a Mediator by the parties must be confirmed by the Centre (Art.5.1). When deciding whether to confirm a Mediator, the Centre may take into account attributes such as his or her nationality, language skills, qualifications, experience and availability as well as, of course his or her independence and impartiality (Art.5.4 and 5.3). In case the parties are unable to jointly appoint a Mediator, the Centre has the power, after consultation with the parties, to appoint a Mediator or to propose a list of Mediators to the parties. In the latter case, the nomination must be confirmed by the Centre (Art.5.2).
The new Rules also expressly endorse the previous practice of the ADR Secretariat of acting as an appointing authority. This practice has been codified in the Appendix to the Mediation Rules under Article 6 which indicates that a request for the ICC to appoint a Mediator will be treated in accordance with the ICC Rules for appointment of Experts and Neutrals and must be accompanied by a non-refundable filing fee of $2,000 per Mediator.
Finally, the Appendix gives the parties a clearer view of the administrative expenses which are now based on the amount in dispute and strengthens the power of the Centre in respect of the Mediator’s fees and expenses. Whereas, under the 2001 ADR Rules, the Mediator’s fees were exclusively based on hourly rates fixed by the ICC, the new Rules empower the Centre, subject to the agreement of the parties and the Mediator, to fix the Mediator’s fees on the basis of a single fixed fee for the whole proceedings. This provision improves the visibility and control of the parties over the costs of the Mediation and will undoubtedly encourage the use of the Mediation Rules.
It is clear that the ICC ADR Rules were successful, given that the ICC has administered over a hundred ADR cases in various domains during the last decade. The improvements implemented under the new Mediation Rules should reinforce this achievement as the 2014 Mediation Rules strengthen the administration by the ICC and increase the effectiveness of the proceedings in particular for multi-tiered dispute resolution proceedings.
The author thanks Ms. Anne-Charlotte Antoine for her contribution.
1) The revision of the ADR Rules was led by Christopher Newmark (Chair of the Consultative Task Force in the revision of the ICC ADR Rules and incoming Chair of the Commission on Arbitration and ADR), Peter Wolrich (current Chair of the Commission on Arbitration and ADR), Hannah Tümpel (Senior Counsel and Manager of the ICC International Center for ADR) and Hélène Van Lith (Secretary of the Commission on Arbitration and ADR) as referred to in The New ICC Mediation Rules, ICC Bull. Vol. 24/ No.2 -2013
2) H. Tümpel & C. Sudborough, ICC’s ADR Rules 2001-2010: Current Practices, Case Examples and Lessons Learned, in A. Ingenhousz, Ed. ADR in Business, Practice and Issues across Countries and Cultures, Vol. II (Kluwer 2011)