By Celeste Estefania Salinas Quero, Legal Counsel for the Stockholm Chambers of Commerce
On 26 April 2016, the Arbitration Institute of the Stockholm Chamber of Commerce (“SCC”) released for public consultation drafts of the 2017 Arbitration Rules and 2017 Rules for Expedited Arbitrations (“draft rules”). The drafts, which update the 2010 SCC Rules, are the result of a one and half-years of work by a special committee composed of international and local practitioners, academics, SCC Board and Secretariat members (“Committee”). The Committee was divided into three sub-committees that in parallel and coordinately revised the SCC Rules and worked with special provisions for investor-state disputes.
Whereas some of the revisions codify existing practices, most of them represent an effort to streamline procedures and to introduce new provisions in response to the users’ increased demand for time and cost-efficient proceedings, as at the same time disputes have become more complex, involving multiple contracts and multiple parties.
Some of the major suggested revisions to the SCC Rules include:
• Introduction of a summary procedure: The draft rules allow parties to make a request to the tribunal to decide one or more issues of fact or law without undertaking all the normal steps for the arbitration. If adopted, the provision will serve as a case management tool by allowing tribunals to, for example, decide in a summary fashion frivolous claims or allegations that are unsustainable. The provision has been shaped in flexible terms and parties may at any time during the proceedings request the tribunal to decide an issue by way of a summary procedure.
• Use of an administrative secretary: Tribunal secretaries have caught the attention of the arbitration community over the past years, but few institutions have regulated the tribunal-parties-secretary relationship in their rules. The draft rules provide for the appointment of administrative secretaries upon party approval. The draft rules also allow for the removal of an administrative secretary if justifiable doubts exist as to the secretary’s independence or impartiality. The suggested provision maintains the flexibility that characterizes the SCC Rules and does not define the role nor the tasks of the administrative secretary.
• Appendix with special provisions for investor-state arbitrations: The SCC’s dominant position in the administration of investment disputes combined with the arbitration community’s increased awareness of the various interests involved in investor-state disputes, led to the inclusion of draft provisions that allow third persons and non-disputing treaty parties to make a written submission in the arbitration. After consulting the parties, tribunals also may invite third persons and non-disputing treaty parties to make such a submission. In the case of non-disputing treaty parties, they may also make submissions on material issues of treaty interpretation. The provisions do not change the SCC’s nor the tribunal’s commitment to confidentiality, however.
• Security for costs: The draft rules empower tribunals to order a claimant or counterclaimant to pay security for costs. They also give tribunals discretion to deal with the consequences of a party’s non-compliance, by being able to stay or dismiss the party’s claims in whole or in part, if the party fails to provide the security.
• Time and costs: The SCC, parties and tribunals are expressly required to act in an efficient and expeditious manner. This express obligation is linked to both the SCC’s authority to determine the tribunal’s fees, having regard to the extent to which the tribunal has acted in an efficient and expeditious manner, and to the tribunal’s power to apportion the arbitration and party costs, having regard to the outcome of the case, each party’s contribution to the efficiency and expeditiousness of the arbitration and any other relevant circumstances.
• Multi-parties and multi-contract arbitration: The draft rules detail procedures to facilitate the joinder of additional parties and to deal with claims arising out of multiple contracts in a single proceeding. While joinder is a new feature under the SCC Rules, the possibility to deal in one arbitration with claims arising out of more than one arbitration agreement reflects practices that parties have used in the past. The draft rules provide for the SCC Board to decide on joinder and on multiple claims to proceed in a single arbitration. The SCC Board’s decision is made on a preliminary basis. The tribunal’s power to decide on its jurisdiction over the parties and over the claims remains unchanged.
• Frontloading the case: In a suggested amendment applicable only to the Rules for Expedited Arbitrations, the draft rules propose that the submission of the request for arbitration and the answer also constitutes the submission of the statement of claim and the statement of defence, respectively. The suggested amendment aims at optimizing the use of the time before and after the referral of the case to the sole arbitrator, by having the main submissions in place when the arbitrator receives the case file. The draft rules also provide for a case management conference after the case referral and encourages sole arbitrators to establish a timetable no later than 7 days from the referral of the case.
The draft rules will be discussed at a hearing on 9 June 2016 in Stockholm. The revised SCC Rules are expected to enter into force on 1 January 2017, in connection with the SCC’s centennial anniversary.