New SCC Arbitration Rules and new SCC Rules for Expedited Arbitrations came into force on 1 January 2017. The changes largely bring the SCC into line with recent changes made by other major arbitral institutions, and should make SCC arbitrations more tightly managed, and better able to deal with multiple claims and parties.
The key changes are as follows:
New SCC Arbitration Rules
- New summary procedure
This is an innovative change on the part of the SCC. If there are any issues which a party thinks should be summarily determined at an early stage, because an allegation is manifestly unsustainable or because a claim is unfounded as a matter of law, other institutions only provide for early dismissal which still require certain procedural steps to be complied with. With the SCC, parties can now ask for such issues to be dealt with summarily at any stage of the arbitration as a case management decision, meaning a saving of time and costs.
- Multiple parties and multiple claims
In line with other institutions, the SCC has made it easier for disputes involving multiple parties and multiple claims to be brought and heard as a single arbitration, saving time and costs. If a party objects, the SCC will still allow it to proceed as a single arbitration if considers it has jurisdiction over all the disputes, that the arbitration agreements are “compatible” (i.e. that the relief sought arises out of the same transaction or series of transactions), and having regard to the efficiency and expeditiousness of the proceedings and other relevant circumstances.
- Administrative secretary
Recognising the differences in opinion on the administrative secretary’s role, the SCC has allowed parties a greater say in what this should be, as the tribunal now has to ask the parties’ approval to the proposed secretary and consult them as to what their tasks should be. A party’s request to remove a secretary, however, will not prevent the arbitration from proceeding.
- Number of arbitrators – 1 or 3?
The assumption that the number of arbitrators will be three if there is no agreement is replaced instead with the SCC Board now deciding the number, having regard to the complexity of the case, amount in dispute and other relevant circumstances.
- Case management
Tighter control over case management is encouraged in that tribunals must now hold a case management conference straight after the referral of the case, and immediately thereafter it must establish a timetable for the conduct of the entire arbitration, including the date for the making of the award.
- Security for costs
If a defendant (to a claim or counterclaim) thinks that the other side may not be able to pay any costs against it if they lose the claim, they can now ask the tribunal to order the other side to give security for costs, and specify the consequences of failure (which could be dismissal of the claim).
- New emphasis on efficiency and expeditiousness
There is a new requirement that all parties will act in an efficient and expeditious manner, and the tribunal must now make decisions having regard to the efficiency and expeditiousness of the arbitration process, particularly in relation to decisions regarding joinder, multiple contracts, consolidation, case management conference, summary procedure, and perhaps most importantly, costs. The tribunal can now apportion the costs of the arbitration as well as party costs, and must do so with regard to each party’s contribution to the efficiency and expeditiousness of the arbitration. (The same power is given to the emergency arbitrator regarding the costs of emergency proceedings.)
- New rules for investment treaty disputes
A foreign investor in a country can make a compensation claim against the country if it feels it has breached the provisions of an investment treaty which gives various protections to foreign investors. Such claims are normally arbitrated but the nature of the dispute can affect third parties, so the rules have been changed to make it easier for them to make submissions but without disrupting the arbitrations.
New SCC Rules for Expedited Arbitrations (“Expedited Rules”)
Expedited arbitrations are faster and simpler procedures appropriate for disputes of a simpler nature; the parties have to agree to use this procedure. The Expedited Rules have been amended to reflect the changes mentioned above (unless inappropriate for an expedited procedure). They have also introduced some new features, as follows:
- Faster statements of case - the request for arbitration and the answer will now also constitute the submission of the statement of claim and the statement of defence.
- Faster case management – the arbitrator will establish a timetable no later than 7 days from the referral of the case, including the date for making the award.
- Rules swap – if the SCC thinks that the dispute would be better dealt with under the main SCC Arbitration Rules, they can invite the parties to swap the rules.
Michael Frisby